Warner Music Group Corp. today announced its third-quarter
financial results for the period ended June 30, 2024.
"Our strong subscription streaming growth in Q3 was driven by
the performance of our music and healthy industry trends,” said
Robert Kyncl, CEO of Warner Music Group. “We’re nurturing the next
generation of artists and songwriters, creating fresh impact for
our iconic catalog, and working with our partners to increase the
value of music. Our commitment to long-term artist development,
combined with a flatter structure in recorded music, will enable us
to super-serve talent and set WMG up for sustained future
growth."
“Our Q3 results were highlighted by strong margin expansion and
operating cash flow growth, reflecting robust streaming performance
and disciplined cost management,” said Bryan Castellani, CFO,
Warner Music Group. “Looking ahead, we are focused on delivering a
strong close to the year. The industry remains healthy and we
continue to position ourselves for long-term success.”
Total WMG
| Total WMG
Summary Results |
| (dollars
in millions) |
| |
| |
For the Three Months Ended June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
% Change |
|
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
Revenue |
$ |
1,554 |
|
|
$ |
1,564 |
|
|
|
-1 |
% |
|
$ |
4,796 |
|
|
$ |
4,451 |
|
|
|
8 |
% |
| Recorded Music revenue |
|
1,251 |
|
|
|
1,282 |
|
|
|
-2 |
% |
|
|
3,885 |
|
|
|
3,664 |
|
|
|
6 |
% |
| Music Publishing revenue |
|
305 |
|
|
|
283 |
|
|
|
8 |
% |
|
|
915 |
|
|
|
790 |
|
|
|
16 |
% |
| Operating income |
|
207 |
|
|
|
189 |
|
|
|
10 |
% |
|
|
680 |
|
|
|
578 |
|
|
|
18 |
% |
| Adjusted OIBDA(1) |
|
316 |
|
|
|
297 |
|
|
|
6 |
% |
|
|
1,079 |
|
|
|
918 |
|
|
|
18 |
% |
| Net income |
|
141 |
|
|
|
124 |
|
|
|
14 |
% |
|
|
430 |
|
|
|
285 |
|
|
|
51 |
% |
| Net cash provided by operating
activities |
|
188 |
|
|
|
146 |
|
|
|
29 |
% |
|
|
450 |
|
|
|
349 |
|
|
|
29 |
% |
| Free Cash Flow |
|
160 |
|
|
|
113 |
|
|
|
42 |
% |
|
|
367 |
|
|
|
260 |
|
|
|
41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) See
"Supplemental Disclosures Regarding Non-GAAP Financial Measures" at
the end of this release for details regarding this measure. |
| |
Revenue was down 0.6% (or up 0.6% in constant currency).
Consistent with the prior quarter, Recorded Music digital revenue
growth was unfavorably impacted by the termination of the
distribution agreement with BMG (the “BMG Termination”), which
resulted in $26 million less revenue compared to the prior-year
quarter, and a renewal with one of the Company’s digital partners
(the “Digital License Renewal”), which resulted in a $3 million
unfavorable impact within Recorded Music streaming revenue compared
to the prior year quarter. Music Publishing digital revenue growth
was unfavorably impacted by a $7 million benefit in the prior-year
quarter due to a ruling by the Copyright Royalty Board in
Phonorecords III upholding higher percentage of revenue U.S.
mechanical royalty rates (the “CRB Rate Benefit”). Excluding the
BMG Termination, the Digital License Renewal, and the CRB Rate
Benefit, total revenue was up 1.7% (or 3.1% in constant
currency).
Digital revenue increased 4.7% (or 5.9% in constant currency)
and streaming revenue increased 5.5% (or 6.7% in constant
currency). Recorded Music streaming revenue increased 5.0% (or 6.4%
in constant currency); however, adjusted for the impact of the BMG
Termination of $25 million and the Digital License Renewal of $3
million, Recorded Music streaming revenue was up 8.7% (or 10.2% in
constant currency). Music Publishing streaming revenue increased
7.9% (the same in constant currency); however, adjusted for the
impact of the CRB Rate Benefit of $7 million, Music Publishing
streaming revenue was up 12.3% (the same in constant currency).
Revenue increases in the quarter were also driven by growth in
Music Publishing performance and synchronization revenue, partially
offset by lower Recorded Music physical, licensing and artist
services and expanded-rights revenue and Music Publishing
mechanical revenue.
Operating income increased 9.5% (or 11.9% in constant currency)
from $189 million to $207 million primarily due to the factors
affecting Adjusted OIBDA discussed below, as well as a $9 million
decrease in amortization expense due to certain intangible assets
becoming fully amortized, and a $1 million net gain on a
divestiture of certain non-core owned and operated media properties
in the quarter, partially offset by $5 million of incremental
expenses related to transformation initiatives and other related
costs, and higher non-cash stock-based compensation of $3
million.
Adjusted OIBDA increased 6.4% from $297 million to $316 million
(or 7.8% in constant currency) and Adjusted OIBDA margin increased
1.3 percentage points to 20.3% from 19.0% in the prior-year quarter
(the same in constant currency). The increases in Adjusted OIBDA
and Adjusted OIBDA margin were driven primarily by strong operating
performance, savings from the March 2023 restructuring plan (the
“2023 Restructuring Plan”) and savings from the Strategic
Restructuring Plan, of which a portion has been reinvested in the
Company’s business.
Net income increased 13.7% from $124 million to $141 million.
The increase in net income was primarily due to the factors
described above, a loss on extinguishment of debt in the prior-year
quarter, and lower income tax expense primarily due to a benefit in
the quarter related to foreign derived income and the impact of
exchange rates on the Company’s Euro-denominated debt resulting in
a higher gain in the quarter compared to the prior-year quarter,
partially offset by an increase in unrealized losses related to
certain investments and an increase in interest expense, net,
primarily due to increased costs on the Company’s variable rate
debt.
Basic and Diluted earnings per share were $0.27 for both the
Class A and Class B shareholders due to the net income attributable
to the Company in the quarter of $141 million.
As of June 30, 2024, the Company reported a cash balance of
$607 million, total debt of $3.978 billion and net debt (defined as
total debt, net of deferred financing costs, premiums and
discounts, minus cash and equivalents) of $3.371 billion.
Cash provided by operating activities increased 29% to $188
million in the quarter compared to $146 million in the prior-year
quarter. The increase was largely driven by strong operating
performance and the timing of working capital. Capital expenditures
decreased 15% to $28 million from $33 million in the prior-year
quarter. Free Cash Flow, as defined below, increased 42% to $160
million from $113 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 June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
% Change |
|
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
Revenue |
$ |
1,251 |
|
|
$ |
1,282 |
|
|
|
-2 |
% |
|
$ |
3,885 |
|
|
$ |
3,664 |
|
|
|
6 |
% |
| Operating income |
|
230 |
|
|
|
207 |
|
|
|
11 |
% |
|
|
739 |
|
|
|
641 |
|
|
|
15 |
% |
| Adjusted OIBDA(1) |
|
281 |
|
|
|
264 |
|
|
|
6 |
% |
|
|
965 |
|
|
|
812 |
|
|
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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 June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
For the Three Months Ended June 30, 2023 |
|
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30,
2023 |
|
For the Nine Months Ended June 30, 2023 |
| |
As reported |
|
As reported |
|
Constant |
|
As reported |
|
As reported |
|
Constant |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Digital |
$ |
882 |
|
|
$ |
846 |
|
|
$ |
834 |
|
|
$ |
2,638 |
|
|
$ |
2,445 |
|
|
$ |
2,434 |
|
| Physical |
|
120 |
|
|
|
126 |
|
|
|
125 |
|
|
|
385 |
|
|
|
377 |
|
|
|
380 |
|
|
Total Digital and Physical |
|
1,002 |
|
|
|
972 |
|
|
|
959 |
|
|
|
3,023 |
|
|
|
2,822 |
|
|
|
2,814 |
|
| Artist services and
expanded-rights |
|
159 |
|
|
|
218 |
|
|
|
215 |
|
|
|
489 |
|
|
|
555 |
|
|
|
557 |
|
| Licensing |
|
90 |
|
|
|
92 |
|
|
|
91 |
|
|
|
373 |
|
|
|
287 |
|
|
|
289 |
|
| Total Recorded
Music |
$ |
1,251 |
|
|
$ |
1,282 |
|
|
$ |
1,265 |
|
|
$ |
3,885 |
|
|
$ |
3,664 |
|
|
$ |
3,660 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Recorded Music revenue was down 2.4% (or 1.1% in constant
currency) driven by decreases in artist services and
expanded-rights, physical and licensing revenue, partially offset
by growth in digital revenue. Excluding the impact from the BMG
Termination of $26 million and the Digital License Renewal of $3
million, Recorded Music revenue decreased 0.2% (or increased 1.2%
in constant currency). Digital revenue was up 4.3% (or 5.8% in
constant currency) and streaming revenue was up 5.0% (or 6.4% in
constant currency). Adjusted for the impact of the BMG Termination
of $25 million and the Digital License Renewal of $3 million,
Recorded Music streaming revenue was up 8.7% (or 10.2% in constant
currency). Streaming revenue reflects growth in subscription
revenue of 7.0% (or 8.5% in constant currency), partially offset by
a decline in ad-supported revenue of 0.4% (or growth of 0.9% in
constant currency). Adjusted for the impact of the BMG Termination
of $24 million and the Digital License Renewal of $3 million,
subscription revenue increased 12.1% (or 13.7% in constant
currency). Licensing revenue decreased 2.2% (or 1.1% in constant
currency), driven by the timing of copyright infringement
settlements. Physical revenue decreased 4.8% (or 4.0% in constant
currency), primarily driven by timing of releases and strong U.S.
releases in the prior-year quarter. Artist services and
expanded-rights revenue decreased 27.1% (or 26.0% in constant
currency) primarily due to lower merchandising revenue, lower
concert promotion revenue primarily related to Japan and France,
and a decrease in revenue related to the exit of the Company’s
owned and operated media properties announced as part of the
Strategic Restructuring Plan. Major sellers included Dua Lipa,
Benson Boone, Zach Bryan, Teddy Swims, and Twenty One Pilots.
Recorded Music operating income was $230 million, an increase
from $207 million in the prior-year quarter, and operating margin
was up 2.3 percentage points to 18.4% versus 16.1% in the
prior-year quarter. The increase in operating income was primarily
due to the factors affecting Adjusted OIBDA discussed below, as
well as an $11 million decrease in amortization expense compared to
the prior-year quarter due to certain intangible assets becoming
fully amortized.
Adjusted OIBDA increased 6.4% to $281 million from $264 million
(or 7.7% in constant currency) and Adjusted OIBDA margin increased
1.9 percentage points to 22.5% from 20.6% in the prior-year quarter
(the same in constant currency). The increases in Adjusted OIBDA
and Adjusted OIBDA margin were driven primarily by strong operating
performance and savings from the 2023 Restructuring Plan and the
Strategic Restructuring Plan, of which a portion has been
reinvested in the Company’s business.
Music Publishing
| Music
Publishing Summary Results |
| (dollars
in millions) |
| |
|
|
|
|
|
|
|
|
|
|
| |
For the Three Months Ended June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
% Change |
|
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
Revenue |
$ |
305 |
|
|
$ |
283 |
|
|
|
8 |
% |
|
$ |
915 |
|
|
$ |
790 |
|
|
|
16 |
% |
| Operating income |
|
53 |
|
|
|
50 |
|
|
|
6 |
% |
|
|
185 |
|
|
|
151 |
|
|
|
23 |
% |
| Adjusted OIBDA(1) |
|
79 |
|
|
|
74 |
|
|
|
7 |
% |
|
|
247 |
|
|
|
222 |
|
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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 June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
For the Three Months Ended June 30, 2023 |
|
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
For the Nine Months Ended June 30, 2023 |
| |
As reported |
|
As reported |
|
Constant |
|
As reported |
|
As reported |
|
Constant |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Performance |
$ |
52 |
|
|
$ |
40 |
|
|
$ |
39 |
|
|
$ |
155 |
|
|
$ |
130 |
|
|
$ |
129 |
|
| Digital |
|
194 |
|
|
|
182 |
|
|
|
181 |
|
|
|
577 |
|
|
|
477 |
|
|
|
479 |
|
| Mechanical |
|
13 |
|
|
|
16 |
|
|
|
16 |
|
|
|
43 |
|
|
|
46 |
|
|
|
47 |
|
| Synchronization |
|
42 |
|
|
|
41 |
|
|
|
41 |
|
|
|
129 |
|
|
|
126 |
|
|
|
127 |
|
| Other |
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
|
11 |
|
|
|
11 |
|
|
|
10 |
|
| Total Music
Publishing |
$ |
305 |
|
|
$ |
283 |
|
|
$ |
280 |
|
|
$ |
915 |
|
|
$ |
790 |
|
|
$ |
792 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Music Publishing revenue increased 7.8% (or 8.9% in constant
currency). Excluding the impact from the CRB Rate Benefit of $7
million, Music Publishing revenue increased 10.5% (or increased
11.7% in constant currency). The increase was driven by growth in
digital, performance and synchronization revenue. Digital revenue
increased 6.6% (or 7.2% in constant currency) and streaming revenue
increased 7.9% (the same in constant currency). Excluding the CRB
Rate Benefit in the prior-year quarter, Music Publishing digital
revenue increased 10.9% (or 11.5% in constant currency) and
streaming revenue increased 12.3% (the same in constant currency),
reflecting continued market growth, expansion of our publishing
catalog and timing of payments. Performance revenue increased 30.0%
(or 33.3% in constant currency) due to an increase in touring
activity outside the U.S. and U.S. radio activity. Mechanical
revenue decreased $3 million or 18.8% (the same in constant
currency), primarily driven by lower physical sales.
Synchronization revenue grew 2.4% (the same in constant currency),
driven by higher international commercial licensing activity,
partially offset by the timing of copyright infringement
settlements in the U.S.
Music Publishing operating income increased to $53 million
compared to $50 million in the prior-year quarter and operating
margin decreased 0.3 percentage points to 17.4%. The increase in
operating income was primarily driven by the same factors affecting
Adjusted OIBDA discussed below.
Music Publishing Adjusted OIBDA increased 6.8% to $79 million
(or 8.2% in constant currency) driven by higher revenue and
Adjusted OIBDA margin increased 0.1 percentage point to 26.2% from
26.1% in the prior-year quarter (the same in constant
currency).
Financial details for the quarter can be found in the Company’s
current Quarterly Report on Form 10-Q for the period ended
June 30, 2024, 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 and Nine Months Ended June 30, 2024 versus June
30, 2023 |
| (dollars
in millions) |
| |
|
|
|
|
|
| |
For the Three MonthsEnded June 30, 2024 |
|
For the Three MonthsEnded June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
Revenue |
$ |
1,554 |
|
|
$ |
1,564 |
|
|
|
-1 |
% |
| Cost and
expenses: |
|
|
|
|
|
| Cost of revenue |
|
(830 |
) |
|
|
(850 |
) |
|
|
-2 |
% |
| Selling, general and
administrative expenses |
|
(462 |
) |
|
|
(461 |
) |
|
|
— |
% |
| Restructuring and
impairments |
|
(1 |
) |
|
|
— |
|
|
|
— |
% |
| Amortization expense |
|
(55 |
) |
|
|
(64 |
) |
|
|
-14 |
% |
| Total costs and
expenses |
$ |
(1,348 |
) |
|
$ |
(1,375 |
) |
|
|
-2 |
% |
| Net gain on divestiture |
|
1 |
|
|
|
— |
|
|
|
— |
% |
| Operating
income |
$ |
207 |
|
|
$ |
189 |
|
|
|
10 |
% |
| Loss on extinguishment of
debt |
|
— |
|
|
|
(4 |
) |
|
|
-100 |
% |
| Interest expense, net |
|
(40 |
) |
|
|
(38 |
) |
|
|
5 |
% |
| Other income, net |
|
4 |
|
|
|
20 |
|
|
|
-80 |
% |
| Income before income
taxes |
$ |
171 |
|
|
$ |
167 |
|
|
|
2 |
% |
| Income tax expense |
|
(30 |
) |
|
|
(43 |
) |
|
|
-30 |
% |
| Net
income |
$ |
141 |
|
|
$ |
124 |
|
|
|
14 |
% |
| Less: Income attributable to
noncontrolling interest |
|
(2 |
) |
|
|
(2 |
) |
|
|
— |
% |
|
Net income attributable to Warner Music Group
Corp. |
$ |
139 |
|
|
$ |
122 |
|
|
|
14 |
% |
| |
|
|
|
|
|
|
Net income per share attributable to common
stockholders: |
|
|
|
|
|
|
Class A – Basic and Diluted |
$ |
0.27 |
|
|
$ |
0.23 |
|
|
|
|
Class B – Basic and Diluted |
$ |
0.27 |
|
|
$ |
0.23 |
|
|
|
| |
|
|
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
| Revenue |
$ |
4,796 |
|
|
$ |
4,451 |
|
|
|
8 |
% |
| Cost and
expenses: |
|
|
|
|
|
| Cost of revenue |
|
(2,501 |
) |
|
|
(2,332 |
) |
|
|
7 |
% |
| Selling, general and
administrative expenses |
|
(1,384 |
) |
|
|
(1,353 |
) |
|
|
2 |
% |
| Restructuring and
impairments |
|
(96 |
) |
|
|
(41 |
) |
|
|
— |
% |
| Amortization expense |
|
(167 |
) |
|
|
(188 |
) |
|
|
-11 |
% |
| Total costs and
expenses |
$ |
(4,148 |
) |
|
$ |
(3,914 |
) |
|
|
6 |
% |
| Net gain on divestiture |
|
32 |
|
|
|
41 |
|
|
|
-22 |
% |
| Operating
income |
$ |
680 |
|
|
$ |
578 |
|
|
|
18 |
% |
| Loss on extinguishment of
debt |
|
— |
|
|
|
(4 |
) |
|
|
(100) |
% |
| Interest expense, net |
|
(121 |
) |
|
|
(105 |
) |
|
|
15 |
% |
| Other expense, net |
|
(9 |
) |
|
|
(72 |
) |
|
|
-88 |
% |
| Income before income
taxes |
$ |
550 |
|
|
$ |
397 |
|
|
|
39 |
% |
| Income tax expense |
|
(120 |
) |
|
|
(112 |
) |
|
|
7 |
% |
| Net
income |
$ |
430 |
|
|
$ |
285 |
|
|
|
51 |
% |
| Less: Income attributable to
noncontrolling interest |
|
(36 |
) |
|
|
(7 |
) |
|
|
— |
% |
| Net income
attributable to Warner Music Group Corp. |
$ |
394 |
|
|
$ |
278 |
|
|
|
42 |
% |
| |
|
|
|
|
|
| Net income per share
attributable to common stockholders: |
|
|
|
|
|
|
Class A – Basic and Diluted |
$ |
0.75 |
|
|
$ |
0.53 |
|
|
|
|
Class B – Basic and Diluted |
$ |
0.75 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Figure 2.
Warner Music Group Corp. - Condensed Consolidated Balance Sheets at
June 30, 2024 versus September 30, 2023 |
| (dollars in
millions) |
|
|
|
|
|
| |
|
|
|
|
|
| |
June 30, 2024 |
|
September 30, 2023 |
|
% Change |
| |
(unaudited) |
|
|
|
|
| Assets |
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
Cash and equivalents |
$ |
607 |
|
|
$ |
641 |
|
|
|
-5 |
% |
|
Accounts receivable, net |
|
1,222 |
|
|
|
1,120 |
|
|
|
9 |
% |
|
Inventories |
|
92 |
|
|
|
126 |
|
|
|
-27 |
% |
|
Royalty advances expected to be recouped within one year |
|
450 |
|
|
|
413 |
|
|
|
9 |
% |
|
Prepaid and other current assets |
|
112 |
|
|
|
102 |
|
|
|
10 |
% |
| Total current
assets |
$ |
2,483 |
|
|
$ |
2,402 |
|
|
|
3 |
% |
| Royalty advances expected to
be recouped after one year |
|
837 |
|
|
|
688 |
|
|
|
22 |
% |
| Property, plant and equipment,
net |
|
464 |
|
|
|
458 |
|
|
|
1 |
% |
| Operating lease right-of-use
assets, net |
|
226 |
|
|
|
245 |
|
|
|
-8 |
% |
| Goodwill |
|
2,003 |
|
|
|
1,993 |
|
|
|
1 |
% |
| Intangible assets subject to
amortization, net |
|
2,309 |
|
|
|
2,353 |
|
|
|
-2 |
% |
| Intangible assets not subject
to amortization |
|
150 |
|
|
|
149 |
|
|
|
1 |
% |
| Deferred tax assets, net |
|
29 |
|
|
|
32 |
|
|
|
-9 |
% |
| Other assets |
|
329 |
|
|
|
225 |
|
|
|
46 |
% |
| Total
assets |
$ |
8,830 |
|
|
$ |
8,545 |
|
|
|
3 |
% |
| Liabilities and
Equity |
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
200 |
|
|
$ |
300 |
|
|
|
-33 |
% |
|
Accrued royalties |
|
2,582 |
|
|
|
2,219 |
|
|
|
16 |
% |
|
Accrued liabilities |
|
499 |
|
|
|
533 |
|
|
|
-6 |
% |
|
Accrued interest |
|
29 |
|
|
|
18 |
|
|
|
61 |
% |
|
Operating lease liabilities, current |
|
43 |
|
|
|
41 |
|
|
|
5 |
% |
|
Deferred revenue |
|
168 |
|
|
|
371 |
|
|
|
-55 |
% |
|
Other current liabilities |
|
52 |
|
|
|
57 |
|
|
|
-9 |
% |
| Total current
liabilities |
$ |
3,573 |
|
|
$ |
3,539 |
|
|
|
1 |
% |
| Long-term debt |
|
3,978 |
|
|
|
3,964 |
|
|
|
— |
% |
| Operating lease liabilities,
noncurrent |
|
232 |
|
|
|
255 |
|
|
|
-9 |
% |
| Deferred tax liabilities,
net |
|
251 |
|
|
|
216 |
|
|
|
16 |
% |
| Other noncurrent
liabilities |
|
161 |
|
|
|
141 |
|
|
|
14 |
% |
| Total
liabilities |
$ |
8,195 |
|
|
$ |
8,115 |
|
|
|
1 |
% |
| Equity: |
|
|
|
|
|
| Class A common stock |
$ |
— |
|
|
$ |
— |
|
|
|
— |
% |
| Class B common stock |
|
1 |
|
|
|
1 |
|
|
|
— |
% |
| Additional paid-in
capital |
|
2,053 |
|
|
|
2,015 |
|
|
|
2 |
% |
| Accumulated deficit |
|
(1,260 |
) |
|
|
(1,387 |
) |
|
|
-9 |
% |
| Accumulated other
comprehensive loss, net |
|
(311 |
) |
|
|
(322 |
) |
|
|
-3 |
% |
| Total Warner Music
Group Corp. equity |
$ |
483 |
|
|
$ |
307 |
|
|
|
57 |
% |
| Noncontrolling interest |
|
152 |
|
|
|
123 |
|
|
|
24 |
% |
| Total
equity |
|
635 |
|
|
|
430 |
|
|
|
48 |
% |
| Total liabilities and
equity |
$ |
8,830 |
|
|
$ |
8,545 |
|
|
|
3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Figure 3.
Warner Music Group Corp. - Summarized Statements of Cash Flows,
Three and Nine Months Ended June 30, 2024 versus June 30,
2023 |
| (dollars in
millions) |
|
|
|
| |
|
|
|
| |
For the Three MonthsEnded June 30, 2024 |
|
For the Three MonthsEnded June 30, 2023 |
| |
(unaudited) |
|
(unaudited) |
|
Net cash provided by operating activities |
$ |
188 |
|
|
$ |
146 |
|
| Net cash used in investing
activities |
|
(76 |
) |
|
|
(53 |
) |
| Net cash used in financing
activities |
|
(90 |
) |
|
|
(90 |
) |
| Effect of foreign currency
exchange rates on cash and equivalents |
|
(2 |
) |
|
|
(4 |
) |
| Net increase (decrease) in
cash and equivalents |
$ |
20 |
|
|
$ |
(1 |
) |
| |
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
| |
(unaudited) |
|
(unaudited) |
| Net cash provided by operating
activities |
$ |
450 |
|
|
$ |
349 |
|
| Net cash used in investing
activities |
|
(201 |
) |
|
|
(104 |
) |
| Net cash used in financing
activities |
|
(280 |
) |
|
|
(233 |
) |
| Effect of foreign currency
exchange rates on cash and equivalents |
|
(3 |
) |
|
|
4 |
|
| Net (decrease) increase in
cash and equivalents |
$ |
(34 |
) |
|
$ |
16 |
|
| |
|
|
|
|
|
|
|
| Figure 4.
Warner Music Group Corp. - Digital Revenue Summary, Three and Nine
Months Ended June 30, 2024 versus June 30, 2023 |
| (dollars
in millions) |
| |
|
|
|
|
|
| |
For the Three MonthsEnded June 30, 2024 |
|
For the Three MonthsEnded June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
| Recorded
Music |
|
|
|
|
|
|
Subscription |
$ |
640 |
|
|
$ |
598 |
|
|
|
7 |
% |
|
Ad-Supported |
|
223 |
|
|
|
224 |
|
|
|
— |
% |
|
Streaming |
$ |
863 |
|
|
$ |
822 |
|
|
|
5 |
% |
|
Downloads and Other Digital |
|
19 |
|
|
|
24 |
|
|
|
-21 |
% |
| Total Recorded Music
Digital Revenue |
$ |
882 |
|
|
$ |
846 |
|
|
|
4 |
% |
| |
|
|
|
|
|
| Music
Publishing |
|
|
|
|
|
|
Streaming |
$ |
192 |
|
|
$ |
178 |
|
|
|
8 |
% |
|
Downloads and Other Digital |
|
2 |
|
|
|
4 |
|
|
|
-50 |
% |
| Total Music Publishing
Digital Revenue |
$ |
194 |
|
|
$ |
182 |
|
|
|
7 |
% |
| |
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
Streaming |
$ |
1,055 |
|
|
$ |
1,000 |
|
|
|
6 |
% |
|
Downloads and Other Digital |
|
21 |
|
|
|
28 |
|
|
|
-25 |
% |
|
Intersegment Eliminations |
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
% |
| Total Digital
Revenue |
$ |
1,075 |
|
|
$ |
1,027 |
|
|
|
5 |
% |
| |
|
|
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
| Recorded
Music |
|
|
|
|
|
|
Subscription |
$ |
1,899 |
|
|
$ |
1,725 |
|
|
|
10 |
% |
|
Ad-Supported |
|
679 |
|
|
|
650 |
|
|
|
4 |
% |
|
Streaming |
$ |
2,578 |
|
|
$ |
2,375 |
|
|
|
9 |
% |
| Downloads and Other
Digital |
|
60 |
|
|
|
70 |
|
|
|
-14 |
% |
| Total Recorded Music
Digital Revenue |
$ |
2,638 |
|
|
$ |
2,445 |
|
|
|
8 |
% |
| |
|
|
|
|
|
| Music
Publishing |
|
|
|
|
|
|
Streaming |
$ |
570 |
|
|
$ |
466 |
|
|
|
22 |
% |
|
Downloads and Other Digital |
|
7 |
|
|
|
11 |
|
|
|
-36 |
% |
| Total Music Publishing
Digital Revenue |
$ |
577 |
|
|
$ |
477 |
|
|
|
21 |
% |
| |
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
Streaming |
$ |
3,148 |
|
|
$ |
2,841 |
|
|
|
11 |
% |
|
Downloads and Other Digital |
|
67 |
|
|
|
81 |
|
|
|
-17 |
% |
|
Intersegment Eliminations |
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
% |
| Total Digital
Revenue |
$ |
3,214 |
|
|
$ |
2,921 |
|
|
|
10 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
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 and Nine Months Ended June 30, 2024 versus June 30,
2023 |
| (dollars
in millions) |
| |
|
|
|
|
|
| |
For the Three Months Ended June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
Net income attributable to Warner Music Group
Corp. |
$ |
139 |
|
|
$ |
122 |
|
|
|
14 |
% |
| Income attributable to
noncontrolling interest |
|
2 |
|
|
|
2 |
|
|
|
— |
% |
| Net
income |
$ |
141 |
|
|
$ |
124 |
|
|
|
14 |
% |
| Income tax expense |
|
30 |
|
|
|
43 |
|
|
|
-30 |
% |
| Income including
income taxes |
$ |
171 |
|
|
$ |
167 |
|
|
|
2 |
% |
| Other income, net |
|
(4 |
) |
|
|
(20 |
) |
|
|
-80 |
% |
| Interest expense, net |
|
40 |
|
|
|
38 |
|
|
|
5 |
% |
| Loss on extinguishment of
debt |
|
— |
|
|
|
4 |
|
|
|
-100 |
% |
| Operating
income |
$ |
207 |
|
|
$ |
189 |
|
|
|
10 |
% |
| Amortization expense |
|
55 |
|
|
|
64 |
|
|
|
-14 |
% |
| Depreciation expense |
|
25 |
|
|
|
22 |
|
|
|
14 |
% |
| OIBDA |
$ |
287 |
|
|
$ |
275 |
|
|
|
4 |
% |
| Restructuring and
impairments |
|
1 |
|
|
|
— |
|
|
|
— |
% |
| Transformation initiatives and
other related costs |
|
18 |
|
|
|
13 |
|
|
|
38 |
% |
| Net gain on divestitures |
|
(1 |
) |
|
|
— |
|
|
|
— |
% |
| Executive transition
costs |
|
— |
|
|
|
1 |
|
|
|
-100 |
% |
| Non-cash stock-based
compensation and other related costs |
|
11 |
|
|
|
8 |
|
|
|
38 |
% |
| Adjusted
OIBDA |
$ |
316 |
|
|
$ |
297 |
|
|
|
6 |
% |
| |
|
|
|
|
|
| Operating income
margin |
|
13.3 |
% |
|
|
12.1 |
% |
|
|
| Adjusted OIBDA
margin |
|
20.3 |
% |
|
|
19.0 |
% |
|
|
| |
|
|
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
Net income attributable to Warner Music Group
Corp. |
$ |
394 |
|
|
$ |
278 |
|
|
|
42 |
% |
| Income attributable to
noncontrolling interest |
|
36 |
|
|
|
7 |
|
|
|
— |
% |
| Net
income |
$ |
430 |
|
|
$ |
285 |
|
|
|
51 |
% |
| Income tax expense |
|
120 |
|
|
|
112 |
|
|
|
7 |
% |
| Income including
income taxes |
$ |
550 |
|
|
$ |
397 |
|
|
|
39 |
% |
| Other expense, net |
|
9 |
|
|
|
72 |
|
|
|
-88 |
% |
| Interest expense, net |
|
121 |
|
|
|
105 |
|
|
|
15 |
% |
| Loss on extinguishment of
debt |
|
— |
|
|
|
4 |
|
|
|
-100 |
% |
| Operating
income |
$ |
680 |
|
|
$ |
578 |
|
|
|
18 |
% |
| Amortization expense |
|
167 |
|
|
|
188 |
|
|
|
-11 |
% |
| Depreciation expense |
|
77 |
|
|
|
65 |
|
|
|
18 |
% |
| OIBDA |
$ |
924 |
|
|
$ |
831 |
|
|
|
11 |
% |
| Restructuring and
impairments |
|
96 |
|
|
|
41 |
|
|
|
— |
% |
| Transformation initiatives and
other related costs |
|
56 |
|
|
|
39 |
|
|
|
44 |
% |
| Executive transition
costs |
|
— |
|
|
|
4 |
|
|
|
-100 |
% |
| Net gain on divestitures |
|
(32 |
) |
|
|
(41 |
) |
|
|
-22 |
% |
| Non-cash stock-based
compensation and other related costs |
|
35 |
|
|
|
44 |
|
|
|
-20 |
% |
| Adjusted
OIBDA |
$ |
1,079 |
|
|
$ |
918 |
|
|
|
18 |
% |
| |
|
|
|
|
|
| Operating income
margin |
|
14.2 |
% |
|
|
13.0 |
% |
|
|
| Adjusted OIBDA
margin |
|
22.5 |
% |
|
|
20.6 |
% |
|
|
| |
|
|
|
|
|
| Figure 6.
Warner Music Group Corp. - Reconciliation of Segment Operating
Income to Adjusted OIBDA, Three and Nine Months Ended June 30, 2024
versus June 30, 2023 |
| (dollars in
millions) |
|
|
|
|
|
| |
|
|
|
|
|
| |
For the Three Months Ended June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
|
Total WMG operating income – GAAP |
$ |
207 |
|
|
$ |
189 |
|
|
|
10 |
% |
| Depreciation and amortization
expense |
|
(80 |
) |
|
|
(86 |
) |
|
|
-7 |
% |
| Total WMG
OIBDA |
$ |
287 |
|
|
$ |
275 |
|
|
|
4 |
% |
| Restructuring and
impairments |
|
1 |
|
|
|
— |
|
|
|
— |
% |
| Transformation initiatives and
other related costs |
|
18 |
|
|
|
13 |
|
|
|
38 |
% |
| Net gain on divestitures |
|
(1 |
) |
|
|
— |
|
|
|
— |
% |
| Executive transition
costs |
|
— |
|
|
|
1 |
|
|
|
-100 |
% |
| Non-cash stock-based
compensation and other related costs |
|
11 |
|
|
|
8 |
|
|
|
38 |
% |
| Total WMG Adjusted
OIBDA |
$ |
316 |
|
|
$ |
297 |
|
|
|
6 |
% |
| Total WMG Adjusted
OIBDA margin |
|
20.3 |
% |
|
|
19.0 |
% |
|
|
| |
|
|
|
|
|
| Recorded Music
operating income – GAAP |
$ |
230 |
|
|
$ |
207 |
|
|
|
11 |
% |
| Depreciation and amortization
expense |
|
(44 |
) |
|
|
(54 |
) |
|
|
-19 |
% |
| Recorded Music
OIBDA |
$ |
274 |
|
|
$ |
261 |
|
|
|
5 |
% |
| Restructuring and
impairments |
|
1 |
|
|
|
— |
|
|
|
— |
% |
| Net gain on divestitures |
|
— |
|
|
|
— |
|
|
|
— |
% |
| Non-cash stock-based
compensation and other related costs |
$ |
6 |
|
|
$ |
3 |
|
|
|
100 |
% |
| Recorded Music
Adjusted OIBDA |
$ |
281 |
|
|
$ |
264 |
|
|
|
6 |
% |
| Recorded Music
Adjusted OIBDA margin |
|
22.5 |
% |
|
|
20.6 |
% |
|
|
| |
|
|
|
|
|
| Music Publishing
operating income – GAAP |
$ |
53 |
|
|
$ |
50 |
|
|
|
6 |
% |
| Depreciation and amortization
expense |
|
(25 |
) |
|
|
(23 |
) |
|
|
9 |
% |
| Music Publishing
OIBDA |
$ |
78 |
|
|
$ |
73 |
|
|
|
7 |
% |
| Net gain on divestitures |
|
— |
|
|
|
— |
|
|
|
— |
% |
| Non-cash stock-based
compensation and other related costs |
|
1 |
|
|
|
1 |
|
|
|
— |
% |
| Music Publishing
Adjusted OIBDA |
$ |
79 |
|
|
$ |
74 |
|
|
|
7 |
% |
| Music Publishing
Adjusted OIBDA margin |
|
26.2 |
% |
|
|
26.1 |
% |
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
(unaudited) |
|
(unaudited) |
|
|
| Total WMG operating
income – GAAP |
$ |
680 |
|
|
$ |
578 |
|
|
|
18 |
% |
| Depreciation and amortization
expense |
|
(244 |
) |
|
|
(253 |
) |
|
|
-4 |
% |
| Total WMG
OIBDA |
$ |
924 |
|
|
$ |
831 |
|
|
|
11 |
% |
| Restructuring and
impairments |
|
96 |
|
|
|
41 |
|
|
|
— |
% |
| Transformation initiatives and
other related costs |
|
56 |
|
|
|
39 |
|
|
|
44 |
% |
| Executive transition
costs |
|
— |
|
|
|
4 |
|
|
|
-100 |
% |
| Net gain on divestitures |
|
(32 |
) |
|
|
(41 |
) |
|
|
-22 |
% |
| Non-cash stock-based
compensation and other related costs |
|
35 |
|
|
|
44 |
|
|
|
-20 |
% |
| Total WMG Adjusted
OIBDA |
$ |
1,079 |
|
|
$ |
918 |
|
|
|
18 |
% |
| Total WMG Adjusted
OIBDA margin |
|
22.5 |
% |
|
|
20.6 |
% |
|
|
| |
|
|
|
|
|
| Recorded Music
operating income – GAAP |
$ |
739 |
|
|
$ |
641 |
|
|
|
15 |
% |
| Depreciation and amortization
expense |
|
(135 |
) |
|
|
(160 |
) |
|
|
-16 |
% |
| Recorded Music
OIBDA |
$ |
874 |
|
|
$ |
801 |
|
|
|
9 |
% |
| Restructuring and
impairment |
|
89 |
|
|
|
41 |
|
|
|
— |
% |
| Net gain on divestitures |
|
(17 |
) |
|
|
(41 |
) |
|
|
-59 |
% |
| Non-cash stock-based
compensation and other related costs |
|
19 |
|
|
|
11 |
|
|
|
73 |
% |
| Recorded Music
Adjusted OIBDA |
$ |
965 |
|
|
$ |
812 |
|
|
|
19 |
% |
| Recorded Music
Adjusted OIBDA margin |
|
24.8 |
% |
|
|
22.2 |
% |
|
|
| |
|
|
|
|
|
| Music Publishing
operating income – GAAP |
$ |
185 |
|
|
$ |
151 |
|
|
|
23 |
% |
| Depreciation and amortization
expense |
|
(73 |
) |
|
|
(69 |
) |
|
|
6 |
% |
| Music Publishing
OIBDA |
$ |
258 |
|
|
$ |
220 |
|
|
|
17 |
% |
| Net gain on divestitures |
|
(14 |
) |
|
|
— |
|
|
|
— |
% |
| Non-cash stock-based
compensation and other related costs |
|
3 |
|
|
|
2 |
|
|
|
50 |
% |
| Music Publishing
Adjusted OIBDA |
$ |
247 |
|
|
$ |
222 |
|
|
|
11 |
% |
| Music Publishing
Adjusted OIBDA margin |
|
27.0 |
% |
|
|
28.1 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
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
and Nine Months Ended June 30, 2024 versus June 30, 2023 As
Reported and Constant Currency |
| (dollars
in millions) |
| |
|
|
|
|
|
|
|
| |
For the Three Months Ended June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
For the Three Months Ended June 30, 2023 |
|
% Change |
| |
As reported |
|
As reported |
|
Constant |
|
Constant |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| U.S. revenue |
|
|
|
|
|
|
|
|
Recorded Music |
$ |
517 |
|
|
$ |
557 |
|
|
$ |
557 |
|
|
|
(7) |
% |
|
Music Publishing |
|
161 |
|
|
|
147 |
|
|
|
147 |
|
|
|
10 |
% |
| International revenue |
|
|
|
|
|
|
|
|
Recorded Music |
$ |
734 |
|
|
$ |
725 |
|
|
$ |
708 |
|
|
|
4 |
% |
|
Music Publishing |
|
144 |
|
|
|
136 |
|
|
|
133 |
|
|
|
8 |
% |
| Intersegment eliminations |
|
(2 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
100 |
% |
| Total
Revenue |
$ |
1,554 |
|
|
$ |
1,564 |
|
|
$ |
1,544 |
|
|
|
1 |
% |
| |
|
|
|
|
|
|
|
| Revenue by
Segment: |
|
|
|
|
|
|
|
| Recorded Music |
|
|
|
|
|
|
|
|
Digital |
$ |
882 |
|
|
$ |
846 |
|
|
$ |
834 |
|
|
|
6 |
% |
|
Physical |
|
120 |
|
|
|
126 |
|
|
|
125 |
|
|
|
(4) |
% |
|
Total Digital and Physical |
$ |
1,002 |
|
|
$ |
972 |
|
|
$ |
959 |
|
|
|
4 |
% |
|
Artist services and expanded-rights |
|
159 |
|
|
|
218 |
|
|
|
215 |
|
|
|
(26) |
% |
|
Licensing |
|
90 |
|
|
|
92 |
|
|
|
91 |
|
|
|
(1) |
% |
| Total Recorded
Music |
$ |
1,251 |
|
|
$ |
1,282 |
|
|
$ |
1,265 |
|
|
|
(1) |
% |
| Music Publishing |
|
|
|
|
|
|
|
|
Performance |
$ |
52 |
|
|
$ |
40 |
|
|
$ |
39 |
|
|
|
33 |
% |
|
Digital |
|
194 |
|
|
|
182 |
|
|
|
181 |
|
|
|
7 |
% |
|
Mechanical |
|
13 |
|
|
|
16 |
|
|
|
16 |
|
|
|
(19) |
% |
|
Synchronization |
|
42 |
|
|
|
41 |
|
|
|
41 |
|
|
|
2 |
% |
|
Other |
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
|
33 |
% |
| Total Music
Publishing |
$ |
305 |
|
|
$ |
283 |
|
|
$ |
280 |
|
|
|
9 |
% |
| Intersegment eliminations |
|
(2 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
100 |
% |
| Total
Revenue |
$ |
1,554 |
|
|
$ |
1,564 |
|
|
$ |
1,544 |
|
|
|
1 |
% |
| |
|
|
|
|
|
|
|
| Total Digital
Revenue |
$ |
1,075 |
|
|
$ |
1,027 |
|
|
$ |
1,015 |
|
|
|
6 |
% |
| |
|
|
|
|
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months EndedJune 30, 2023 |
|
For the Nine Months Ended June 30, 2023 |
|
% Change |
| |
As reported |
|
As reported |
|
Constant |
|
Constant |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| U.S. revenue |
|
|
|
|
|
|
|
|
Recorded Music |
$ |
1,652 |
|
|
$ |
1,618 |
|
|
$ |
1,618 |
|
|
|
2 |
% |
|
Music Publishing |
|
503 |
|
|
|
415 |
|
|
|
415 |
|
|
|
21 |
% |
| International revenue |
|
|
|
|
|
|
|
|
Recorded Music |
$ |
2,233 |
|
|
$ |
2,046 |
|
|
$ |
2,042 |
|
|
|
9 |
% |
|
Music Publishing |
|
412 |
|
|
|
375 |
|
|
|
377 |
|
|
|
9 |
% |
| Intersegment eliminations |
|
(4 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
33 |
% |
| Total
Revenue |
$ |
4,796 |
|
|
$ |
4,451 |
|
|
$ |
4,449 |
|
|
|
8 |
% |
| |
|
|
|
|
|
|
|
| Revenue by
Segment: |
|
|
|
|
|
|
|
| Recorded Music |
|
|
|
|
|
|
|
|
Digital |
$ |
2,638 |
|
|
$ |
2,445 |
|
|
$ |
2,434 |
|
|
|
8 |
% |
|
Physical |
|
385 |
|
|
|
377 |
|
|
|
380 |
|
|
|
1 |
% |
|
Total Digital and Physical |
$ |
3,023 |
|
|
$ |
2,822 |
|
|
$ |
2,814 |
|
|
|
7 |
% |
|
Artist services and expanded-rights |
|
489 |
|
|
|
555 |
|
|
|
557 |
|
|
|
(12) |
% |
|
Licensing |
|
373 |
|
|
|
287 |
|
|
|
289 |
|
|
|
29 |
% |
| Total Recorded
Music |
$ |
3,885 |
|
|
$ |
3,664 |
|
|
$ |
3,660 |
|
|
|
6 |
% |
| Music Publishing |
|
|
|
|
|
|
|
|
Performance |
$ |
155 |
|
|
$ |
130 |
|
|
$ |
129 |
|
|
|
20 |
% |
|
Digital |
|
577 |
|
|
|
477 |
|
|
|
479 |
|
|
|
20 |
% |
|
Mechanical |
|
43 |
|
|
|
46 |
|
|
|
47 |
|
|
|
(9) |
% |
|
Synchronization |
|
129 |
|
|
|
126 |
|
|
|
127 |
|
|
|
2 |
% |
|
Other |
|
11 |
|
|
|
11 |
|
|
|
10 |
|
|
|
10 |
% |
| Total Music
Publishing |
$ |
915 |
|
|
$ |
790 |
|
|
$ |
792 |
|
|
|
16 |
% |
| Intersegment eliminations |
|
(4 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
33 |
% |
| Total
Revenue |
$ |
4,796 |
|
|
$ |
4,451 |
|
|
$ |
4,449 |
|
|
|
8 |
% |
| |
|
|
|
|
|
|
|
| Total Digital
Revenue |
$ |
3,214 |
|
|
$ |
2,921 |
|
|
$ |
2,913 |
|
|
|
10 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Figure 8.
Warner Music Group Corp. - Adjusted OIBDA by Segment, Three and
Nine Months Ended June 30, 2024 versus June 30, 2023 As Reported
and Constant Currency |
| (dollars
in millions) |
| |
|
|
|
|
|
|
|
| |
For the Three Months Ended June 30, 2024 |
|
For the Three Months Ended June 30, 2023 |
|
For the Three Months Ended June 30, 2023 |
|
Change % |
| |
As reported |
|
As reported |
|
Constant |
|
Constant |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Total WMG Adjusted OIBDA |
$ |
316 |
|
|
$ |
297 |
|
|
$ |
293 |
|
|
|
7.8 |
% |
| Adjusted OIBDA margin |
|
20.3 |
% |
|
|
19.0 |
% |
|
|
19.0 |
% |
|
|
| |
|
|
|
|
|
|
|
| Recorded Music Adjusted
OIBDA |
$ |
281 |
|
|
$ |
264 |
|
|
$ |
261 |
|
|
|
7.7 |
% |
| Recorded Music Adjusted OIBDA
margin |
|
22.5 |
% |
|
|
20.6 |
% |
|
|
20.6 |
% |
|
|
| |
|
|
|
|
|
|
|
| Music Publishing Adjusted
OIBDA |
$ |
79 |
|
|
$ |
74 |
|
|
$ |
73 |
|
|
|
8.2 |
% |
| Music Publishing Adjusted
OIBDA margin |
|
26.2 |
% |
|
|
26.1 |
% |
|
|
26.1 |
% |
|
|
| |
|
|
|
|
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
|
For the Nine Months Ended June 30, 2023 |
|
Change % |
| |
As reported |
|
As reported |
|
Constant |
|
Constant |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| Total WMG Adjusted OIBDA |
$ |
1,079 |
|
|
$ |
918 |
|
|
$ |
918 |
|
|
|
17.5 |
% |
| Adjusted OIBDA margin |
|
22.5 |
% |
|
|
20.6 |
% |
|
|
20.6 |
% |
|
|
| |
|
|
|
|
|
|
|
| Recorded Music Adjusted
OIBDA |
$ |
965 |
|
|
$ |
812 |
|
|
$ |
812 |
|
|
|
18.8 |
% |
| Recorded Music Adjusted OIBDA
margin |
|
24.8 |
% |
|
|
22.2 |
% |
|
|
22.2 |
% |
|
|
| |
|
|
|
|
|
|
|
| Music Publishing Adjusted
OIBDA |
$ |
247 |
|
|
$ |
222 |
|
|
$ |
222 |
|
|
|
11.3 |
% |
| Music Publishing Adjusted
OIBDA margin |
|
27.0 |
% |
|
|
28.1 |
% |
|
|
28.0 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and
Nine Months Ended June 30, 2024 versus June 30, 2023 |
| (dollars
in millions) |
| |
|
|
|
| |
For the Three MonthsEnded June 30, 2024 |
|
For the Three MonthsEnded June 30, 2023 |
| |
(unaudited) |
|
(unaudited) |
|
Net cash provided by operating activities |
$ |
188 |
|
|
$ |
146 |
|
| Less: Capital
expenditures |
|
28 |
|
|
|
33 |
|
| |
|
|
|
| Free Cash
Flow |
$ |
160 |
|
|
$ |
113 |
|
| |
|
|
|
| |
For the Nine Months Ended June 30, 2024 |
|
For the Nine Months Ended June 30, 2023 |
| |
(unaudited) |
|
(unaudited) |
| Net cash provided by
operating activities |
$ |
450 |
|
|
$ |
349 |
|
| Less: Capital
expenditures |
|
83 |
|
|
|
89 |
|
| |
|
|
|
| Free Cash
Flow |
$ |
367 |
|
|
$ |
260 |
|
| |
|
|
|
|
|
|
|
______________________________________
| Media Contact: |
Investor Contact: |
| James
Steven |
Kareem Chin |
| |
|
| James.Steven@wmg.com |
Investor.Relations@wmg.com |
Warner Music (NASDAQ:WMG)
과거 데이터 주식 차트
부터 7월(7) 2024 으로 8월(8) 2024
Warner Music (NASDAQ:WMG)
과거 데이터 주식 차트
부터 8월(8) 2023 으로 8월(8) 2024
