Warner Music Group Corp. Reports Results for Fiscal Second Quarter Ended March 31, 2025

Rhea-AI Summary

Warner Music Group (WMG) reported mixed Q2 2025 financial results. Total revenue decreased 1% to $1.48 billion, though it increased 1% in constant currency. Net income fell 63% to $36 million, while operating income rose 41% to $168 million. The company's cash position improved significantly, with operating cash flow increasing to $69 million compared to -$31 million in Q2 2024. Recorded Music revenue declined 1.2%, with streaming revenue down 0.4%, while Music Publishing revenue grew 1.3%. Digital revenue decreased 0.8%, though subscription streaming revenue showed growth of 1.1%. The company maintained strong cost management through its Strategic Restructuring Plan, with free cash flow improving to $33 million from -$57 million year-over-year.

Positive

• Operating income increased 41.2% to $168 million
• Operating cash flow improved significantly, turning from -$31M to +$69M
• Free cash flow improved from -$57M to +$33M
• Music Publishing revenue grew 1.3%, showing growth across all segments
• Subscription streaming revenue increased 1.1%

Negative

• Total revenue decreased 1% to $1.48 billion
• Net income fell 63% to $36 million
• Recorded Music revenue declined 1.2%
• Digital revenue decreased 0.8%
• Ad-supported streaming revenue declined 4.7%

Insights

Financial Analyst

Warner Music shows mixed Q2 results – improved cash flow, better operating income offset by revenue decline and substantially lower net income.

Warner Music Group's Q2 2025 financial results tell a story of a company balancing transformation with financial discipline. Total revenue dipped 1% (though increased 1.2% in constant currency), while net income plummeted 63% to $36 million. This dramatic net income decline stems primarily from non-operational factors – a $34 million loss on Euro-denominated debt (compared to a $21 million gain last year) and $6 million in hedging losses.

The 41% increase in operating income to $168 million initially appears impressive but requires context – it's largely attributable to $82 million lower restructuring charges compared to last year rather than core business improvements. Adjusted OIBDA, a better measure of underlying performance, decreased 2.9% to $303 million.

The standout positive is cash flow performance. Cash from operations swung from negative $31 million last year to positive $69 million this quarter. Year-to-date operating cash flow surged 53% and free cash flow jumped 59%, suggesting improved financial efficiency despite revenue challenges.

Within business segments, Recorded Music (approximately 79% of total revenue) declined slightly, with streaming revenue down 0.4% as reported but up 1.6% in constant currency. This reflects subscription growth of 1.1% offset by ad-supported revenue decline of 4.7%. Management attributed streaming challenges to tough year-over-year comparisons, a lighter release slate, market share erosion in China, and a weak advertising environment.

Music Publishing showed modest growth with revenue up 1.3%, driven by improvements across all revenue streams. More encouragingly, this segment's Adjusted OIBDA increased 3.7% with margins expanding to 27.4%.

The company's Strategic Restructuring Plan appears to be delivering on its cost-saving promises, though management is reinvesting a portion of these savings back into the business. CEO Robert Kyncl noted their strategy is "starting to bear fruit" with their strongest chart presence in two years translating to expanding new release market share in the U.S.

This quarter presents the classic case of a company in transition – implementing efficiency measures while trying to maintain growth momentum in a challenging environment.

Financial Highlights

• Q2 Performance Driven by Revenue Growth Across Recorded Music and Music Publishing
• Cost Savings Plans on Track, With Reinvestment Initiatives Accelerating
• Year-to-Date Operating Cash Flow and Free Cash Flow Increased by 53% and 59%, Respectively
  

For the three months ended March 31, 2025

• Total revenue decreased 1%, or increased 1% in constant currency
• Net income decreased 63% to $36 million versus $96 million in the prior-year quarter
• Operating income increased 41% to $168 million versus $119 million in the prior-year quarter
• Adjusted OIBDA decreased 3% to $303 million, versus $312 million in the prior-year quarter, or 1% in constant currency
• Cash provided by operating activities increased to $69 million from cash used in operating activities of $31 million in the prior-year quarter
  

NEW YORK, May 08, 2025 (GLOBE NEWSWIRE) -- Warner Music Group Corp. today announced its second-quarter financial results for the period ended March 31, 2025.

“Our strategy is starting to bear fruit, with our strongest chart presence in two years, translating to expanding new release market share in the US. As a result, our true strength this quarter was partially obscured by challenging comparisons with last year’s outperformance. As we replicate our strategy across other labels and geographies, and drive a virtuous cycle of greater reinvestment, we expect to deliver lasting value for artists and songwriters, and sustained growth and profitability for shareholders,” said Robert Kyncl, CEO of Warner Music Group.

Total WMG

Total WMG Summary Results
(dollars in millions)
	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024				% Change			For the Six Months Ended March 31, 2025			For the Six Months Ended March 31, 2024			% Change
	(unaudited)			(unaudited)							(unaudited)			(unaudited)
Revenue	$	1,484		$	1,494			-1	%		$	3,150		$	3,242		-3	%
Recorded Music revenue		1,175			1,189			-1	%			2,520			2,634		-4	%
Music Publishing revenue		310			306			1	%			633			610		4	%
Operating income		168			119			41	%			382			473		-19	%
Adjusted OIBDA(1)		303			312			-3	%			666			763		-13	%
Net income		36			96			-63	%			277			289		-4	%
Net cash provided by (used for) operating activities		69			(31	)		—	%			401			262		53	%
Free Cash Flow		33			(57	)		—	%			329			207		59	%
(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at the end of this release for details regarding this measure.

Revenue was down 0.7% (or up 1.2% in constant currency). Digital revenue decreased 0.8% (or increased 1.2% in constant currency), driven by a decrease in streaming revenue of 0.3% (or increase of 1.6% in constant currency). Recorded Music streaming revenue decreased 0.4% (or increased 1.6% in constant currency). Music Publishing streaming revenue was flat to the prior-year quarter (or increased 1.6% in constant currency). The decrease in total revenue was driven by lower Recorded Music artist services and expanded-rights revenue, partially offset by higher licensing and physical revenue and growth across Music Publishing digital, performance, synchronization and mechanical revenue.

Operating income increased 41.2% (or 47.4% in constant currency) to $168 million from $119 million primarily due to the factors affecting Adjusted OIBDA discussed below, as well as a decrease in restructuring and impairment charges of $82 million compared to the prior-year quarter, which includes severance costs and impairment losses related to the Strategic Restructuring Plan, partially offset by higher non-cash stock-based compensation of $4 million in the quarter and the impact of a $14 million net gain on divestitures in the prior-year quarter related to a divestiture of certain music publishing rights.

Adjusted OIBDA decreased 2.9% (or 1.0% in constant currency) to $303 million from $312 million and Adjusted OIBDA margin decreased 0.5 percentage points to 20.4% from 20.9% in the prior-year quarter (the same in constant currency). The decreases in Adjusted OIBDA and Adjusted OIBDA margin were primarily driven by revenue mix, partially offset by savings from the Strategic Restructuring Plan, a portion of which has been reinvested in the Company’s business.

Net income decreased 62.5% to $36 million from $96 million. The decrease in net income was due to the factors affecting Adjusted OIBDA described above, as well as the impact of exchange rates on the Company’s Euro-denominated debt resulting in a $34 million loss in the quarter compared to a $21 million gain in the prior-year quarter, and realized and unrealized losses on hedging activity of $6 million in the quarter compared to gains of $5 million in the prior-year quarter. The decrease was also driven by an $11 million increase in income tax expense due to the impact from winding down the Company’s owned and operated media properties in the prior-year quarter, partially offset by the impact of lower pre-tax income in the quarter.

Basic and Diluted earnings per share were $0.07 for both the Class A and Class B shareholders due to the net income attributable to the Company in the quarter of $36 million.

As of March 31, 2025, the Company reported a cash balance of $637 million, total debt of $4.292 billion and net debt (defined as total debt, net of deferred financing costs, premiums and discounts, minus cash and equivalents) of $3.655 billion. Total debt includes $302 million of subsidiary debt acquired in our acquisition of Tempo Music Holdings, LLC (“Tempo”). The debt is secured only by certain music rights owned by Tempo and is nonrecourse to the Company and its subsidiaries, other than Tempo.

Cash provided by operating activities increased to $69 million in the quarter, compared to a use of $31 million in the prior-year quarter. The increase was largely a result of movements in deferred revenue due to timing of digital advances and other movements within working capital, including the timing of annual variable-compensation payments. Capital expenditures increased 38% to $36 million from $26 million in the prior-year quarter, driven by investments in technology. Free Cash Flow, as defined below, increased to $33 million from a use of $57 million in the prior-year quarter, primarily due to the factors affecting cash provided by operating activities described above.

Recorded Music

Recorded Music Summary Results
(dollars in millions)
	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024			% Change			For the Six Months Ended March 31, 2025			For the Six Months Ended March 31, 2024			% Change
	(unaudited)			(unaudited)						(unaudited)			(unaudited)
Revenue	$	1,175		$	1,189		-1	%		$	2,520		$	2,634		-4	%
Operating income		203			134		51	%			441			508		-13	%
Adjusted OIBDA(1)		270			272		-1	%			593			684		-13	%
(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at the end of this release for details regarding this measure.

Recorded Music Revenue
(dollars in millions)
	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024			For the Three Months Ended March 31, 2024			For the Six Months Ended March 31, 2025			For the Six Months Ended March 31, 2024			For the Six Months Ended March 31, 2024
	As reported			As reported			Constant			As reported			As reported			Constant
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Digital	$	841		$	848		$	831		$	1,714		$	1,756		$	1,726
Physical		112			111			110			278			265			263
Total Digital and Physical		953			959			941			1,992			2,021			1,989
Artist services and expanded-rights		117			126			124			313			330			326
Licensing		105			104			102			215			283			281
Total Recorded Music	$	1,175		$	1,189		$	1,167		$	2,520		$	2,634		$	2,596

Recorded Music revenue was down 1.2% (or up 0.7% in constant currency) driven by decreases across digital and artist services and expanded-rights revenue, partially offset by growth in physical and licensing revenue. Digital revenue was down 0.8% (or up 1.2% in constant currency) and streaming revenue was down 0.4% (or up 1.6% in constant currency). Streaming revenue reflects growth in subscription revenue of 1.1% (or 3.2% in constant currency), partially offset by a decline in ad-supported revenue of 4.7% (or 2.9% in constant currency). Streaming revenue was impacted by a challenging year-over-year comparison, largely in subscription streaming revenue, compounded by a lighter release slate and market share loss in China. The decrease in ad-supported revenue was driven by a soft overall ad environment. Licensing revenue increased 1.0% (or 2.9% in constant currency), driven by licensing deals primarily in Japan and the U.S., partially offset by the timing of copyright infringement settlements. Artist services and expanded-rights revenue decreased 7.1% (or 5.6% in constant currency) due to lower concert promotion revenue primarily in France, lower direct-to-consumer merchandising revenue at EMP, and a decrease in revenue related to winding down the Company’s owned and operated media properties in the prior-year quarter. Physical revenue increased 0.9% (or 1.8% in constant currency) driven by new releases in the quarter, primarily in the U.S. and Japan, partially offset by the impact of the BMG Termination. Top physical sellers in the quarter included Mac Miller’s Balloonerism and new releases from ONE OK ROCK and TWICE.

Recorded Music operating income increased 51.5% (or 57.4% in constant currency) to $203 million from $134 million in the prior-year quarter, and operating margin was up 6.0 percentage points to 17.3% versus 11.3% in the prior-year quarter. The increase in operating income was due to the factors affecting Adjusted OIBDA discussed below, as well as a decrease in restructuring and impairment charges of $75 million compared to the prior-year quarter, which includes severance costs and impairment losses related to the Strategic Restructuring Plan in both periods, partially offset by higher non-cash stock-based compensation and other related expenses of $3 million in the quarter and higher amortization expenses of $1 million in the quarter attributable to acquisitions of music-related assets.

Adjusted OIBDA decreased 0.7% (or increased 1.1% in constant currency) to $270 million from $272 million and Adjusted OIBDA margin increased 0.1 percentage point to 23.0% from 22.9% in the prior-year quarter (the same in constant currency). The increases in constant currency Adjusted OIBDA and in Adjusted OIBDA margin were primarily driven by savings from the Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business, partially offset by revenue mix.

Music Publishing

Music Publishing Summary Results
(dollars in millions)
	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024			% Change			For the Six Months Ended March 31, 2025			For the Six Months Ended March 31, 2024			% Change
	(unaudited)			(unaudited)						(unaudited)			(unaudited)
Revenue	$	310		$	306		1	%		$	633		$	610		4	%
Operating income		52			69		-25	%			107			132		-19	%
Adjusted OIBDA(1)		85			82		4	%			168			168		—	%
(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at the end of this release for details regarding this measure.

Music Publishing Revenue
(dollars in millions)
	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024			For the Three Months Ended March 31, 2024			For the Six Months Ended March 31, 2025			For the Six Months Ended March 31, 2024			For the Six Months Ended March 31, 2024
	As reported			As reported			Constant			As reported			As reported			Constant
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Performance	$	53		$	52		$	50		$	109		$	103		$	100
Digital		188			187			185			395			383			380
Mechanical		16			15			14			30			30			29
Synchronization		49			48			48			88			87			87
Other		4			4			4			11			7			7
Total Music Publishing	$	310		$	306		$	301		$	633		$	610		$	603

Music Publishing revenue increased 1.3% (or 3.0% in constant currency). The increase was driven by growth across digital, performance, synchronization and mechanical revenue. Digital revenue increased 0.5% (or 1.6% in constant currency) and streaming revenue was flat to the prior-year quarter (or increased 1.6% in constant currency), driven by the impact of digital deal renewals primarily in the U.S. Performance revenue increased 1.9% (or 6.0% in constant currency) attributable to growth from concerts, radio and live events primarily outside of the U.S. Synchronization revenue increased 2.1% (the same in constant currency) due to higher television and commercial licensing activity and the impact of acquisitions, partially offset by the timing of copyright infringement settlements. Mechanical revenue increased 6.7% (or 14.3% in constant currency), driven by higher physical sales in the quarter.

Music Publishing operating income decreased 24.6% (or 5.5% in constant currency) to $52 million from $69 million in the prior-year quarter and operating margin decreased 5.7 percentage points to 16.8% from 22.5% in the prior-year quarter. The decrease in operating income was driven by the same factors affecting Adjusted OIBDA discussed below, partially offset by the impact of a $14 million net gain on a divestiture of certain music publishing rights in the prior-year quarter and an increase in amortization expense of $4 million in the quarter related to various music publishing copyright acquisitions.

Music Publishing Adjusted OIBDA increased 3.7% (or 4.9% in constant currency) to $85 million from $82 million in the prior-year quarter. Adjusted OIBDA margin increased 0.6 percentage points to 27.4% from 26.8% in the prior-year quarter (or 0.5 percentage points to 27.4% from 26.9% in constant currency). The increases in Adjusted OIBDA and Adjusted OIBDA margin were primarily driven by revenue mix.

Financial details for the quarter can be found in the Company’s current Quarterly Report on Form 10-Q for the period ended March 31, 2025, which will be filed this morning with the Securities and Exchange Commission.

This morning management will be hosting a conference call to discuss the results at 8:30 A.M. EST. The call will be webcast on www.wmg.com.

About Warner Music Group

With a legacy extending back over 200 years, Warner Music Group today is home to an unparalleled family of creative artists, songwriters, and companies that are moving culture across the globe. At the core of WMG’s Recorded Music division are four of the most iconic companies in history: Atlantic, Elektra, Parlophone and Warner Records. They are joined by renowned labels such as TenThousand Projects, 300 Entertainment, Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Reprise, Rhino, Roadrunner, Sire, Spinnin’ Records, Warner Classics and Warner Music Nashville. Warner Chappell Music - which traces its origins back to the founding of Chappell & Company in 1811 - is one of the world's leading music publishers, with a catalog of more than one million copyrights spanning every musical genre from the standards of the Great American Songbook to the biggest hits of the 21st century.

"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995

This communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance. Words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and variations of such words or similar expressions that predict or indicate future events or trends, or that do not relate to historical matters, identify forward-looking statements. All forward-looking statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that management's expectations, beliefs and projections will result or be achieved. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Please refer to our Form 10-K, Form 10-Qs and our other filings with the U.S. Securities and Exchange Commission concerning factors that could cause actual results to differ materially from those described in our forward-looking statements.

We maintain an Internet site at www.wmg.com. We use our website as a channel of distribution for material company information. Financial and other material information regarding Warner Music Group is routinely posted on and accessible at http://investors.wmg.com. In addition, you may automatically receive email alerts and other information about Warner Music Group by enrolling your email address through the “email alerts” section at http://investors.wmg.com. Our website and the information posted on it or connected to it shall not be deemed to be incorporated by reference into this communication.

Figure 1. Warner Music Group Corp. - Condensed Consolidated Statements of Operations, Three Months Ended March 31, 2025 versus March 31, 2024
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024				% Change
	(unaudited)				(unaudited)
Revenue	$	1,484			$	1,494			-1	%
Cost and expenses:
Cost of revenue		(791	)			(791	)		—	%
Selling, general and administrative expenses		(450	)			(446	)		1	%
Restructuring and impairments		(13	)			(95	)		-86	%
Amortization expense		(62	)			(57	)		9	%
Total costs and expenses	$	(1,316	)		$	(1,389	)		-5	%
Net gain on divestiture		—				14			-100	%
Operating income	$	168			$	119			41	%
Interest expense, net		(39	)			(42	)		-7	%
Other (expense) income, net		(64	)			37			—	%
Income before income taxes	$	65			$	114			-43	%
Income tax expense		(29	)			(18	)		61	%
Net income	$	36			$	96			-63	%
Less: Income attributable to noncontrolling interest		—				—			—	%
Net income attributable to Warner Music Group Corp.	$	36			$	96			-63	%
Net income per share attributable to common stockholders:
Class A – Basic and Diluted	$	0.07			$	0.18
Class B – Basic and Diluted	$	0.07			$	0.18
	For the Six Months Ended March 31, 2025				For the Six Months Ended March 31, 2024				% Change
	(unaudited)				(unaudited)
Revenue	$	3,150			$	3,242			-3	%
Cost and expenses:
Cost of revenue		(1,685	)			(1,671	)		1	%
Selling, general and administrative expenses		(924	)			(922	)		—	%
Restructuring and impairments		(40	)			(95	)		-58	%
Amortization expense		(119	)			(112	)		6	%
Total costs and expenses	$	(2,768	)		$	(2,800	)		(1)%
Net gain on divestiture		—				31			-100	%
Operating income	$	382			$	473			-19	%
Loss on extinguishment of debt		—				—			—	%
Interest expense, net		(76	)			(81	)		-6	%
Other income (expense), net		89				(13	)		—	%
Income before income taxes	$	395			$	379			4	%
Income tax expense		(118	)			(90	)		31	%
Net income	$	277			$	289			-4	%
Less: Income attributable to noncontrolling interest		(5	)			(34	)		-85	%
Net income attributable to Warner Music Group Corp.	$	272			$	255			7	%
Net income per share attributable to common stockholders:
Class A – Basic and Diluted	$	0.52			$	0.49
Class B – Basic and Diluted	$	0.52			$	0.49

Figure 2. Warner Music Group Corp. - Condensed Consolidated Balance Sheets at March 31, 2025 versus September 30, 2024
(dollars in millions)
	March 31, 2025				September 30, 2024				% Change
	(unaudited)
Assets
Current assets:
Cash and equivalents	$	637			$	694			-8	%
Accounts receivable, net		1,218				1,255			-3	%
Inventories		88				99			-11	%
Royalty advances expected to be recouped within one year		509				470			8	%
Prepaid and other current assets		147				125			18	%
Total current assets	$	2,599			$	2,643			-2	%
Royalty advances expected to be recouped after one year		945				874			8	%
Property, plant and equipment, net		503				481			5	%
Operating lease right-of-use assets, net		217				225			-4	%
Goodwill		2,031				2,021			—	%
Intangible assets subject to amortization, net		2,764				2,359			17	%
Intangible assets not subject to amortization		151				152			-1	%
Deferred tax assets, net		41				52			-21	%
Other assets		317				348			-9	%
Total assets	$	9,568			$	9,155			5	%
Liabilities and Equity
Current liabilities:
Accounts payable	$	347			$	289			20	%
Accrued royalties		2,600				2,549			2	%
Accrued liabilities		475				641			-26	%
Accrued interest		35				17			—	%
Operating lease liabilities, current		47				45			4	%
Deferred revenue		319				246			30	%
Other current liabilities		93				110			-15	%
Total current liabilities	$	3,916			$	3,897			—	%
Acquisition Corp. long-term debt		3,990				4,014			-1	%
Asset-based long-term debt		302				—			—	%
Operating lease liabilities, noncurrent		216				228			-5	%
Deferred tax liabilities, net		214				195			10	%
Other noncurrent liabilities		140				146			-4	%
Total liabilities	$	8,778			$	8,480			4	%
Equity:
Class A common stock	$	—			$	—			—	%
Class B common stock		1				1			—	%
Additional paid-in capital		2,088				2,077			1	%
Accumulated deficit		(1,230	)			(1,313	)		-6	%
Accumulated other comprehensive loss, net		(292	)			(247	)		18	%
Total Warner Music Group Corp. equity	$	567			$	518			9	%
Noncontrolling interest		223				157			42	%
Total equity		790				675			17	%
Total liabilities and equity	$	9,568			$	9,155			5	%

Figure 3. Warner Music Group Corp. - Summarized Statements of Cash Flows, Three Months Ended March 31, 2025 versus March 31, 2024
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024
	(unaudited)				(unaudited)
Net cash provided by (used in) operating activities	$	69			$	(31	)
Net cash used in investing activities		(121	)			(33	)
Net cash used in financing activities		(121	)			(97	)
Effect of foreign currency exchange rates on cash and equivalents		8				(6	)
Net decrease in cash and equivalents	$	(165	)		$	(167	)

Figure 4. Warner Music Group Corp. - Digital Revenue Summary, Three Months Ended March 31, 2025 versus March 31, 2024
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024			% Change
	(unaudited)				(unaudited)
Recorded Music
Subscription	$	622			$	615		1	%
Ad-Supported		203				213		-5	%
Streaming	$	825			$	828		—	%
Downloads and Other Digital		16				20		-20	%
Total Recorded Music Digital Revenue	$	841			$	848		-1	%
Music Publishing
Streaming	$	185			$	185		—	%
Downloads and Other Digital		3				2		50	%
Total Music Publishing Digital Revenue	$	188			$	187		1	%
Consolidated
Streaming	$	1,010			$	1,013		—	%
Downloads and Other Digital		19				22		-14	%
Intersegment Eliminations		(2	)			—		—	%
Total Digital Revenue	$	1,027			$	1,035		-1	%

Supplemental Disclosures Regarding Non-GAAP Financial Measures

We evaluate our operating performance based on several factors, including the following non-GAAP financial measure:

Adjusted OIBDA

We evaluate our operating performance based on several factors, including our primary financial measure of operating income (loss) before non-cash depreciation of tangible assets and non-cash amortization of intangible assets adjusted to exclude the impact of non-cash stock-based compensation and other related expenses and certain items that affect comparability including but not limited to gains or losses on divestitures and expenses related to restructuring and transformation initiatives (“Adjusted OIBDA”). We consider Adjusted OIBDA to be an important indicator of the operational strengths and performance of our businesses. However, a limitation of the use of Adjusted OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses. Accordingly, Adjusted OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) attributable to Warner Music Group Corp. and other measures of financial performance reported in accordance with United States generally accepted accounting principles (“U.S. GAAP”). In addition, our definition of Adjusted OIBDA may differ from similarly titled measures used by other companies.

Figure 5. Warner Music Group Corp. - Reconciliation of Net Income to Adjusted OIBDA, Three Months Ended March 31, 2025 versus March 31, 2024
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024				% Change
	(unaudited)				(unaudited)
Net income attributable to Warner Music Group Corp.	$	36			$	96			-63	%
Income attributable to noncontrolling interest		—				—			—	%
Net income	$	36			$	96			-63	%
Income tax expense		29				18			61	%
Income including income taxes	$	65			$	114			-43	%
Other expense (income), net		64				(37	)		—	%
Interest expense, net		39				42			-7	%
Operating income	$	168			$	119			41	%
Amortization expense		62				57			9	%
Depreciation expense		28				26			8	%
Restructuring and impairments		13				95			-86	%
Transformation initiative costs		18				19			-5	%
Net gain on divestitures		—				(14	)		-100	%
Non-cash stock-based compensation and other related costs		14				10			40	%
Adjusted OIBDA	$	303			$	312			-3	%
Operating income margin		11.3	%			8.0	%
Adjusted OIBDA margin		20.4	%			20.9	%
	For the Six Months Ended March 31, 2025				For the Six Months Ended March 31, 2024				% Change
	(unaudited)				(unaudited)
Net income attributable to Warner Music Group Corp.	$	272			$	255			7	%
Income attributable to noncontrolling interest		5				34			-85	%
Net income	$	277			$	289			-4	%
Income tax expense		118				90			31	%
Income including income taxes	$	395			$	379			4	%
Other (income) expense, net		(89	)			13			—	%
Interest expense, net		76				81			-6	%
Operating income	$	382			$	473			-19	%
Amortization expense		119				112			6	%
Depreciation expense		57				52			10	%
OIBDA	$	558			$	637			-12	%
Restructuring and impairments		40				95			-58	%
Transformation initiatives and other related costs		35				38			-8	%
Net gain on divestitures		—				(31	)		-100	%
Non-cash stock-based compensation and other related costs		33				24			38	%
Adjusted OIBDA	$	666			$	763			-13	%
Operating income margin		12.1	%			14.6	%
Adjusted OIBDA margin		21.1	%			23.5	%

Figure 6. Warner Music Group Corp. - Reconciliation of Segment Operating Income to Adjusted OIBDA, Three Months Ended March 31, 2025 versus March 31, 2024
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024				% Change
	(unaudited)				(unaudited)
Total WMG operating income – GAAP	$	168			$	119			41	%
Depreciation and amortization expense		(90	)			(83	)		8	%
Total WMG OIBDA	$	258			$	202			28	%
Restructuring and impairments		13				95			-86	%
Transformation initiative costs		18				19			-5	%
Net gain on divestitures		—				(14	)		-100	%
Non-cash stock-based compensation and other related costs		14				10			40	%
Total WMG Adjusted OIBDA	$	303			$	312			-3	%
Total WMG Adjusted OIBDA margin		20.4	%			20.9	%
Recorded Music operating income – GAAP	$	203			$	134			51	%
Depreciation and amortization expense		(46	)			(45	)		2	%
Recorded Music OIBDA	$	249			$	179			39	%
Restructuring and impairments		13				88			-85	%
Non-cash stock-based compensation and other related costs	$	8			$	5			60	%
Recorded Music Adjusted OIBDA	$	270			$	272			-1	%
Recorded Music Adjusted OIBDA margin		23.0	%			22.9	%
Music Publishing operating income – GAAP	$	52			$	69			-25	%
Depreciation and amortization expense		(31	)			(26	)		19	%
Music Publishing OIBDA	$	83			$	95			-13	%
Net gain on divestitures		—				(14	)		-100	%
Non-cash stock-based compensation and other related costs		2				1			100	%
Music Publishing Adjusted OIBDA	$	85			$	82			4	%
Music Publishing Adjusted OIBDA margin		27.4	%			26.8	%
	For the Six Months Ended March 31, 2025				For the Six Months Ended March 31, 2024				% Change
	(unaudited)				(unaudited)
Total WMG operating income – GAAP	$	382			$	473			-19	%
Depreciation and amortization expense		(176	)			(164	)		7	%
Total WMG OIBDA	$	558			$	637			-12	%
Restructuring and impairments		40				95			-58	%
Transformation initiatives and other related costs		35				38			-8	%
Net gain on divestitures		—				(31	)		-100	%
Non-cash stock-based compensation and other related costs		33				24			38	%
Total WMG Adjusted OIBDA	$	666			$	763			-13	%
Total WMG Adjusted OIBDA margin		21.1	%			23.5	%
Recorded Music operating income – GAAP	$	441			$	508			-13	%
Depreciation and amortization expense		(91	)			(92	)		-1	%
Recorded Music OIBDA	$	532			$	600			-11	%
Restructuring and impairment		41				88			-53	%
Net gain on divestitures		—				(17	)		-100	%
Non-cash stock-based compensation and other related costs		20				13			54	%
Recorded Music Adjusted OIBDA	$	593			$	684			-13	%
Recorded Music Adjusted OIBDA margin		23.5	%			26.0	%
Music Publishing operating income – GAAP	$	107			$	132			-19	%
Depreciation and amortization expense		(58	)			(48	)		21	%
Music Publishing OIBDA	$	165			$	180			-8	%
Net gain on divestitures		—				(14	)		-100	%
Non-cash stock-based compensation and other related costs		3				2			50	%
Music Publishing Adjusted OIBDA	$	168			$	168			—	%
Music Publishing Adjusted OIBDA margin		26.5	%			27.5	%

Constant Currency

As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of revenue and Adjusted OIBDA on a constant-currency basis in addition to reported results helps improve the ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant-currency information compares revenue and Adjusted OIBDA between periods as if exchange rates had remained constant period over period. We use revenue and Adjusted OIBDA on a constant-currency basis as one measure to evaluate our performance. We calculate constant-currency by calculating prior-year revenue and Adjusted OIBDA using current-year foreign currency exchange rates. Revenue and Adjusted OIBDA on a constant-currency basis should be considered in addition to, not as a substitute for, revenue and Adjusted OIBDA reported in accordance with U.S. GAAP. Revenue and Adjusted OIBDA on a constant-currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with U.S. GAAP.

Figure 7. Warner Music Group Corp. - Revenue by Geography and Segment, Three Months Ended March 31, 2025 versus March 31, 2024 As Reported and Constant Currency
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024				For the Three Months Ended March 31, 2024				% Change
	As reported				As reported				Constant				Constant
	(unaudited)				(unaudited)				(unaudited)				(unaudited)
U.S. revenue
Recorded Music	$	497			$	508			$	508			-2	%
Music Publishing		161				170				170			-5	%
International revenue
Recorded Music	$	678			$	681			$	659			3	%
Music Publishing		149				136				131			14	%
Intersegment eliminations		(1	)			(1	)			(1	)		—	%
Total Revenue	$	1,484			$	1,494			$	1,467			1	%
Revenue by Segment:
Recorded Music
Digital	$	841			$	848			$	831			1	%
Physical		112				111				110			2	%
Total Digital and Physical	$	953			$	959			$	941			1	%
Artist services and expanded-rights		117				126				124			-6	%
Licensing		105				104				102			3	%
Total Recorded Music	$	1,175			$	1,189			$	1,167			1	%
Music Publishing
Performance	$	53			$	52			$	50			6	%
Digital		188				187				185			2	%
Mechanical		16				15				14			14	%
Synchronization		49				48				48			2	%
Other		4				4				4			—	%
Total Music Publishing	$	310			$	306			$	301			3	%
Intersegment eliminations		(1	)			(1	)			(1	)		—	%
Total Revenue	$	1,484			$	1,494			$	1,467			1	%
	For the Six Months Ended March 31, 2025				For the Six Months Ended March 31, 2024				For the Six Months Ended March 31, 2024				% Change
	As reported				As reported				Constant				Constant
	(unaudited)				(unaudited)				(unaudited)				(unaudited)
U.S. revenue
Recorded Music	$	1,029			$	1,135			$	1,135			(9)%
Music Publishing		334				342				342			(2)%
International revenue
Recorded Music	$	1,491			$	1,499			$	1,461			2	%
Music Publishing		299				268				261			15	%
Intersegment eliminations		(3	)			(2	)			(3	)		—	%
Total Revenue	$	3,150			$	3,242			$	3,196			(1)%
Revenue by Segment:
Recorded Music
Digital	$	1,714			$	1,756			$	1,726			(1)%
Physical		278				265				263			6	%
Total Digital and Physical	$	1,992			$	2,021			$	1,989			—	%
Artist services and expanded-rights		313				330				326			(4)%
Licensing		215				283				281			(23)%
Total Recorded Music	$	2,520			$	2,634			$	2,596			(3)%
Music Publishing
Performance	$	109			$	103			$	100			9	%
Digital		395				383				380			4	%
Mechanical		30				30				29			3	%
Synchronization		88				87				87			1	%
Other		11				7				7			57	%
Total Music Publishing	$	633			$	610			$	603			5	%
Intersegment eliminations		(3	)			(2	)			(3	)		—	%
Total Revenue	$	3,150			$	3,242			$	3,196			(1)%

Figure 8. Warner Music Group Corp. - Adjusted OIBDA by Segment, Three Months Ended March 31, 2025 versus March 31, 2024 As Reported and Constant Currency
(dollars in millions)
	For the Three Months Ended March 31, 2025				For the Three Months Ended March 31, 2024				For the Three Months Ended March 31, 2024				Change %
	As reported				As reported				Constant				Constant
	(unaudited)				(unaudited)				(unaudited)				(unaudited)
Total WMG Adjusted OIBDA	$	303			$	312			$	306			-1.0	%
Adjusted OIBDA margin		20.4	%			20.9	%			20.9	%
Recorded Music Adjusted OIBDA	$	270			$	272			$	267			1.1	%
Recorded Music Adjusted OIBDA margin		23.0	%			22.9	%			22.9	%
Music Publishing Adjusted OIBDA	$	85			$	82			$	81			4.9	%
Music Publishing Adjusted OIBDA margin		27.4	%			26.8	%			26.9	%

Free Cash Flow

Our definition of Free Cash Flow is defined as cash flow provided by operating activities less capital expenditures. We use Free Cash Flow, among other measures, to evaluate our operating performance. Management believes Free Cash Flow provides investors with an important perspective on the cash available to fund our debt service requirements, ongoing working capital requirements, capital expenditure requirements, strategic acquisitions and investments, and any dividends, prepayments of debt or repurchases or retirement of our outstanding debt or notes in open market purchases, privately negotiated purchases, any repurchases of our common stock or otherwise. As a result, Free Cash Flow is a significant measure of our ability to generate long-term value. It is useful for investors to know whether this ability is being enhanced or degraded as a result of our operating performance. We believe the presentation of Free Cash Flow is relevant and useful for investors because it allows investors to view performance in a manner similar to the method management uses.

Free Cash Flow is not a measure of performance calculated in accordance with U.S. GAAP and therefore it should not be considered in isolation of, or as a substitute for, net income (loss) as an indicator of operating performance or cash flow provided by operating activities as a measure of liquidity. Free Cash Flow, as we calculate it, may not be comparable to similarly titled measures employed by other companies. In addition, Free Cash Flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Because Free Cash Flow deducts capital expenditures from “net cash provided by operating activities” (the most directly comparable U.S. GAAP financial measure), users of this information should consider the types of events and transactions that are not reflected. We provide below a reconciliation of Free Cash Flow to the most directly comparable amount reported under U.S. GAAP, which is “net cash provided by operating activities.”

Figure 9. Warner Music Group Corp. - Calculation of Free Cash Flow, Three Months Ended March 31, 2025 versus March 31, 2024
(dollars in millions)
	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024
	(unaudited)			(unaudited)
Net cash provided by (used in) operating activities	$	69		$	(31	)
Less: Capital expenditures		36			26
Free Cash Flow	$	33		$	(57	)
	For the Six Months Ended March 31, 2025			For the Six Months Ended March 31, 2024
	(unaudited)			(unaudited)
Net cash provided by operating activities	$	401		$	262
Less: Capital expenditures		72			55
Free Cash Flow	$	329		$	207

______________________________________

Media Contact:	Investor Contact:
James Steven	Kareem Chin
(212) 275-2213
James.Steven@wmg.com	Investor.Relations@wmg.com

FAQ

What were WMG's key financial metrics for Q2 2025?

WMG reported total revenue of $1.48B (-1%), net income of $36M (-63%), and operating income of $168M (+41%). Operating cash flow improved to $69M from -$31M year-over-year.

How did WMG's streaming revenue perform in Q2 2025?

Overall streaming revenue decreased 0.3%, with subscription revenue growing 1.1% but ad-supported revenue declining 4.7%.

What was WMG's performance in Music Publishing for Q2 2025?

Music Publishing revenue increased 1.3% to $310M, with growth across digital, performance, synchronization, and mechanical revenue streams.

How much cash and debt does WMG have as of March 31, 2025?

WMG reported a cash balance of $637M and total debt of $4.292B, resulting in net debt of $3.655B.

What drove WMG's significant net income decline in Q2 2025?

The decline was due to currency exchange losses on Euro-denominated debt, hedging losses, and higher income tax expenses, despite improved operating income.