Yahoo Movies Warner Music Earnings Rise, But Miss Estimates as Ed Sheeran, Zach Bryan Are Major Sellers
Warner Music Group reported fiscal second-quarter revenue of $1.5 billion, up 7 percent from a year ago, and net income of $96 million, up from $37 million a year ago. While both numbers saw a jump, the company reported earnings per share of 18 cents per share, below Wall Street expectations of 20 cents.
The bottom-line results were driven by a strong operating performance — $12 million in savings from a March 2023 restructuring plan — and the impact of exchange rates on the company’s Euro-denominated debt, which led to a gain of $21 million in the quarter compared to a loss of $20 million in the prior-year quarter.
More from The Hollywood Reporter
Supreme Court Opens Doors to Massive Copyright Infringement Damages In Case Against Warner Music
Warner Music Group Expresses Interest in Buying French Digital Music Company Believe
“Our performance in the quarter was driven by an acceleration in Recorded Music subscription streaming growth and continued momentum in music publishing,” said Bryan Castellani, CFO of Warner Music. “Encouraged by the continued growth in engagement and value of music, we remain focused on delivering on our strategy and driving long-term shareholder value.”
Recorded music revenue was up 4 percent over the year-ago period to reach $1.2 billion, with major sellers including Zach Bryan, Ed Sheeran, Jack Harlow and Green Day. Music publishing revenue was up 19 percent to $306 million in the quarter.
On the earnings call, CEO Robert Kyncl said the company would continue to advocate for price increases at music streaming services to grow artist participation in the revenue. The company has also seen “encouraging early signs in the evolution of royalty models.
“It’s important to note that these shifts to more artist-centric models take time to fully implement and we don’t expect immediate impact on our results,” Kyncl said.
Kyncl said the company also believes in the possibility of using AI to “grow the value of music,” while noting that there still needs to be guardrails, including consent for the use of people’s likeness and voice and that it must be subject to free market negotiations.
In February, the company announced plans to lay off 600 employees to free up more money for music investment over the next decade. The company sold Uproxx, HipHopDX, Dime Magazine to Jarret Myer, Rich Antoniello and will.i.am. The majority of the changes have been implemented, but the company will not realize the full savings until the end of fiscal year 2025.
The second half of the year also includes the impact of new releases from Dua Lipa, twenty one pilots, Sia, Megan Thee Stallion, David Guetta, Charlie Puth and more.
“This quarter we saw a healthy, dynamic mix of hits across a range of genres, geographies, and generations,” Kyncl said. “With our commitment to artist and songwriter development as our guiding principle, we continue to discover great talent, build sustainable careers, champion the value of music, and grow the catalog of tomorrow. We are positioning WMG for long term growth and look forward to delivering successful music in the second half of 2024 and beyond.”
Best of The Hollywood Reporter
Meet the World Builders: Hollywood's Top Physical Production Executives of 2023
Men in Blazers, Hollywood’s Favorite Soccer Podcast, Aims for a Global Empire
