WMG Reports Revenues Up For Q1

Q1 Financials

WARNER MUSIC GROUP has released its first-quarter financial results for the period ended DECEMBER 31st, 2015. The highlights:

• Total revenue grew 2.4%, up 11.1% on a constant-currency basis
• Digital revenue grew 18.0%, up 25.2% on a constant-currency basis
• OIBDA was $137 million versus $102 million in the prior-year quarter
• Net income was $28 million versus a net loss of $41 million in the prior-year quarter

 “We delivered another strong quarter, thanks to great music from our artists and excellent execution from our worldwide team,” WARNER MUSIC GROUP CEO STEPHEN COOPER, said. “Subscription streaming is a major driver of our growth and streaming revenue remains on a trajectory to become our largest revenue source.”

“We achieved robust growth in revenue, OIBDA, margin and cash flow,” added EVP/CFO ERIC LEVIN. “I am also pleased with our recently announced plans to redeem $50 million of our senior notes with cash on hand, which will further strengthen our balance sheet.”

The company noted, "Revenue grew 2.4% (or 11.1% in constant currency). Growth in Recorded Music digital, licensing and artist services and expanded-rights revenue, as well as growth in Music Publishing digital revenue was partially offset by declines in Recorded Music physical revenue and Music Publishing mechanical, performance and synchronization revenue. On a regional basis, as-reported revenue grew in the U.S., Latin America and Asia, offset by currency-related declines across Europe. Digital revenue grew 18.0% (or 25.2% in constant currency), and represented 41.0% of total revenue, compared to 35.6% in the prior-year quarter. Streaming revenue growth more than offset declines in download revenue." 

Operating income was $62 million compared to $23 million in the prior-year quarter. WMG reported, "OIBDA increased 34.3% to $137 million from $102 million in the prior-year quarter and OIBDA margin rose to 16.1% from 12.3% in the prior-year quarter. The increase in operating income, OIBDA and OIBDA margin is largely the result of the increase in revenue and the revenue mix. Adjusted OIBDA rose 18.1% and Adjusted OIBDA margin rose 2.1 percentage points to 16.1% from 14.0%."  

Net income was $28 million compared to a net loss of $41 million in the prior-year quarter. WMG explained, "Net income improved as a result of the increase in revenue and OIBDA, currency-related gains on the company’s Euro-denominated debt and a $3 million income tax benefit versus a $9 million income tax expense in the prior-year quarter. Adjusted operating income, Adjusted OIBDA and Adjusted net income (loss) exclude the impact of PLG-related expenses, other cost-savings initiatives and expenses related to moving the company’s corporate headquarters.  See below for calculations and reconciliations of OIBDA, Adjusted operating income, Adjusted OIBDA and Adjusted net income (loss). " 

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