Warner Music Posts $1.37B in Quarterly Revenue

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Ed Sheeran

Warner Music posted $1.37 billion in revenue for its fiscal fourth quarter ended Sept. 30, the company announced today (Nov. 15). That represents a 22% revenue growth over the same period last year, a time frame largely impacted by the pandemic, and was fueled by 22% growth in recorded music that pushed that segment’s revenues to $1.17 billion alone.

Recorded music’s growth was driven by another big annual jump in digital revenues, which rose 19% in the fourth quarter to $926 million, though that was a tick down from Q3 when that tally was $928 million. Streaming generated a lucky $777 million, up 22% from the same period on 2020. As a share of total revenue, however, digital actually shrunk compared to the same period last year (68.9% vs. 70.9%), due to what the company calls a “partial recovery of certain COVID-impacted revenue streams in the quarter,” including a 71.4% jump in artist services and expanded-rights revenue ($168 million) and a steady uptick in physical revenue — which grew 21% to $127 million for the quarter thanks to consistent demand for vinyl. Licensing revenues fell nearly 8% to $70 million, which the company attributes to one-time licensing settlements in the prior-year quarter. Per usual, the fly in WMG’s recorded music ointment was the downloads and other digital segment, which fell 25% to $30 million for the frame.

Major sellers included Iron Maiden, Dua Lipa, Ed Sheeran, Masked Wolf and Ava Max.

Looking closely at publishing, Warner Chappell Music grew a whopping 21.3% to $205 million from $169 million the same quarter last year. Breaking down publishing revenue, digital generated $120 million, up 20% from $100 million from the same period last year. With Hollywood back in the swing of things, synchronization revenues increased to $39 million from $27 million in Q4 of 2021. Mechanical increased to $13 million from $10, thanks to wider business recovery and an increase in physical sales. As a percentage of revenue, digital decreased slightly to 58.5% of total publishing revenue versus 59.2% in the prior-year quarter.

Looking at profit, all those positive metrics helped pump net income for the quarter to $30 million compared to $1 million in the prior-year quarter, which was impacted by the pandemic. OIBDA (operating income before depreciation and amortization) came in at $179 million versus $155 million in the year earlier period. Operating income was $100 million compared to $88 million in the prior-year quarter.

“Music is essential to billions of people across the globe. But now, more than ever, great talent needs help to cut through the noise. By delivering for new artists and songwriters, returning superstars, and global legends, we’ve also delivered outstanding results in 2021,” said Steve Cooper, CEO, WMG.

Q4 Financials

  • Total revenue:  $1.376 million, up 22% y/y
  • Recorded music revenue: $1.172 million, up 22% y/y
  • Music publishing revenue: $205 million, up 21%
  • Digital revenue: $926 million, up 19% y/y
  • Net income: $30 million, up from $1 million
  • Operating income: $100 million, up 14%
 
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