Warner Music Group Gets Back on Track With Q2 Earnings

After a few less-than-stellar quarters, Warner Music Group is back on more solid ground, posting its Q2 (fiscal Q3) results, with overall revenues up by 9% year-over-year to $1.56 billion.

The numbers: That increase was fueled by an 8% YoY increase in recorded music at $1.28 billion, a 6% YoY increase in digital revenue to $846 million and physical releases increasing slightly YoY at $126 million. Artist services revenue increased 15% YoY to $218 million and licensing revenue was up 23% YoY to $92 million.

Artists Ed Sheeran, Linkin Park and Melanie Martinez were among the quarter’s top releases, and other contributing factors included WMG's recent deal with TikTok and the recent rise in subscription prices for streaming services.

What they're saying: "Our third-quarter results were driven by a wide diversity of music, and our strength came from many different territories, labels, and revenue lines," CEO Robert Kyncl said. "We succeeded with artists and songwriters across the spectrum of genres and generations, with both new releases and catalog projects." Kyncl added, "We expect our momentum to build, led by our extraordinary music and inventive campaigns, as well as improving macro and industry trends."

AI in WMG's future? On the company's earnings call, Kyncl also discussed AI, noting that WMG's artists aren't shying away from using the new technology.

"Working with our artists and songwriters, we are leaning in, moving fast, and working with a network of partners including both generative-AI engines and distribution platforms," he said. "Many Warner artists are already exploring impactful ways to use generative AI to create, augment, and remix their music. We have some great examples from big names on the way later this quarter."