Warner Music Group CEO Stephen Cooper has celebrated “another excellent year” as WMG’s latest financial results revealed a total revenue increase of 16.7%.
Cooper also revealed that WMG has sold nearly three quarters of its Spotify stake, leaving Universal as the one major yet to unveil plans for its shares in the streaming giant.
WMG’s revenue for the three-month period ending March 31 was $963 million, up from 825m in the same period last year. The company posted an operating income of $83m.
Digital revenue increased 24.6%, and represented 56.8% of total revenue, compared to 53.2% in the corresponding quarter last year.
These figures encompass growth in recorded music digital, physical, licensing and music publishing revenue, with declines in artist services and expanded rights revenue.
Cooper said: “We’re having another excellent year with strong momentum around the world in both recorded music and music publishing. 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.”
Eric Levin, Warner Music Group’s EVP and CFO, added: “We showed strong revenue and OIBDA growth in our second quarter. 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.”
Boosted in Q1 by Ed Sheeran’s ÷ album, which performed brilliantly at the Music Week Awards last month, Dua Lipa’s self-titled debut and The Greatest Showman OST, recorded music revenue jumped to $791m, a 15.3% increase year-on-year. A 23% surge in digital recorded music revenue was down to the continued growth of DSPs, while WMG’s publishing revenue rose 20%, from $145m in this quarter 2017, to $174m in 2018.
Warner Music Group's CEO, recorded music, Max Lousada, won the coveted Strat Award at the Music Week Awards, and told Music Week he sees WMG as “uniquely placed” for the future.
Subscribers can read Lousada’s big Music Week interview in full here.
The company reported a cash balance of $612m, with total debt of $2.947 billion and net debt of $2.335 billion.
In today’s earnings call, Cooper revealed that the sale of approximately 75% of WMG’s Spotify shares brought in around $400m.
Cooper said: “This sale has nothing to do with our view of Spotify’s future. We’re hugely optimistic about the growth of subscription streaming, we know it has only just begun to fulfil its potential for global scale. We fully expect Spotify to continue to play a major role in that growth.”
WMG’s Spotify stock has been the subject of much debate since Sony Music Entertainment (SME) announced the sale of 17.2% of its shares in the streaming platform last month.
Universal has not yet revealed its plans for its own Spotify shares, although Music Week sources suggest that the major has yet to sell any of its Spotify stake.
Spotify posted its own Q1 results last week, reporting a 37% revenue increase and a 4m spike in subscribers.