Warner Music Group Posts 17% Q1 Revenue Gain to $1.7B on Bruno Mars, sombr and Streaming Momentum

Warner Music Group reported a 17 percent jump in first-quarter revenue to $1.7 billion, driven by a slate of high-profile releases, streaming growth and a handful of favorable currency moves. The company told investors on Thursday (May 7) that major releases from Bruno Mars and sombr were among the catalysts for the uptick.

The topline was led by recorded music revenue of $1.38 billion, up 17 percent year over year, and music publishing revenue of $353 million, up 14 percent. Operating income rose 57 percent to $264 million, while adjusted operating income before depreciation and amortization climbed 31 percent to $397 million.

“After years of doing hard, unsexy, foundational work, after making tough organizational decisions and redesigns and difficult decisions while growing the business, we have now hit our stride,” Warner CEO Robert Kyncl said on the earnings call. “It feels great to work hard for years and now have consistent delivery, and it feels great to have confidence about the future.”

Digital revenue across recorded music and publishing approached $1.2 billion, up 16.7 percent, with streaming revenue rising 17.1 percent overall. Recorded music streaming grew 16.5 percent and publishing streaming jumped 20 percent, supported by new deals and catalog activity that boosted mechanical and synch income as well.

Beyond Bruno Mars and sombr, WMG cited first-quarter contributions from artists including Alex Warren and Ed Sheeran. The label said recorded music revenue grew 17.4 percent on a reported basis and 12.7 percent on a constant currency basis. Within that mix, artist services and expanded-rights revenue soared 28.6 percent, and physical sales grew 22 percent.

Music publishing also strengthened, with revenue up nearly 14 percent (9.6 percent in constant currency). Performance receipts increased about 10 percent, and synchronization revenue edged up roughly $1 million versus the prior-year quarter.

Currency fluctuations played an outsized role in the quarter. WMG recorded a $22 million gain on euro-denominated debt as the U.S. dollar strengthened and a $12 million gain on intercompany loans, compared with a $27 million loss in the year-ago quarter. Those effects helped net income rise to $181 million from $36 million a year earlier; earnings per share came in at $0.35 versus $0.07 in the prior-year quarter.

On a constant currency basis, total revenue increased 12 percent and adjusted OIBDA rose 24 percent, the company said.

Warner and private equity partner Bain have been active on the catalog front, too. “We have spent $650 million from our joint venture, called Beethoven JV, to acquire a number of heavyweight … iconic, high-margin catalogs,” WMG CFO Armin Zerza told investors on the call.

“At the same time, we are leading the industry in AI initiatives, which we believe will be a material contributor to our top and bottom line growth, starting in fiscal 2027,” Zerza added.

WMG framed those catalog buys and a 2023 reorganization as key drivers of margin improvement. The company said it is achieving profit expansion toward the “high end” of its target, roughly 200 basis points this year; adjusted OIBDA margin expanded 2.5 percentage points to 22.9 percent in the quarter.

For a company that has been reshaping its cost base and deal-making strategy over recent years, the quarter reads as validation that those moves are translating into steadier results: stronger streaming growth, growing artist-services revenue and a pipeline of catalog assets that should help insulate future top-line volatility.

Key figures from the quarter: total revenue $1.7 billion (up 17 percent, 12 percent constant currency); net income $181 million (up from $36 million); operating income $264 million (up 57 percent); adjusted OIBDA $397 million (up 31 percent); recorded music $1.38 billion (up 17 percent); music publishing $353 million (up 14 percent); and earnings per share $0.35 (vs. $0.07).