Warner Music(WMG) - 2025 Q1 - Quarterly Results

Revenue Performance - Total revenue decreased by 5% to $1,666 million compared to$ 1,748 million in the prior-year quarter[4] - Recorded Music revenue declined by 7% to $1,345 million, while Music Publishing revenue increased by 6% to$ 323 million[5] - Digital revenue decreased by 2% to $873 million, while streaming revenue fell by 1.9%[7] - Total revenue for Warner Music Group decreased by 5% to$ 1,666 million for the three months ended December 31, 2024, compared to $1,748 million in the prior year[31] - Recorded Music revenue decreased by 6% to$ 1.345 billion for the three months ended December 31, 2024, compared to $1.445 billion in the same period of 2023[40] - Music Publishing revenue increased by 7% to$ 323 million for the three months ended December 31, 2024, compared to $304 million in the same period of 2023[40] - International Recorded Music revenue remained stable at$ 813 million for the three months ended December 31, 2024, compared to $818 million in the same period of 2023[40] Net Income and Operating Income - Net income rose by 25% to$ 241 million from $193 million in the prior-year quarter[4] - Net income attributable to Warner Music Group Corp. increased by 48% to$ 236 million, compared to $159 million in the prior year[31] - Operating income decreased by 40% to$ 214 million, with Adjusted OIBDA down by 20% to $363 million[4] - Adjusted OIBDA decreased by 20% to$ 363 million for the three months ended December 31, 2024, down from $451 million in the prior year[36] - Adjusted OIBDA for Recorded Music - Digital License Renewal decreased to$ 6 million, a decline of 12% year-over-year[44] - Recorded Music Licensing Extension revenue was $68 million, down 75% compared to the previous year[44] Cash Flow and Financial Position - Operating cash flow grew by 13% to$ 332 million, with free cash flow increasing by 12% to $296 million[12] - The company reported a cash balance of$ 802 million and total debt of $3.955 billion as of December 31, 2024[11] - Cash and equivalents increased by 16% to$ 802 million as of December 31, 2024, compared to $694 million at the end of the previous quarter[32] - Total assets remained stable at$ 9,146 million, with total liabilities slightly decreasing to $8,449 million[32] - For the three months ended December 31, 2024, net cash provided by operating activities was$ 332 million, compared to $293 million for the same period in 2023, representing a 13.3% increase[47] - Free Cash Flow for the three months ended December 31, 2024, was$ 296 million, compared to $264 million in 2023, reflecting a 12.1% increase[47] Strategic Initiatives - A new multi-year agreement was announced with Spotify covering both recorded music and music publishing[4] - The company announced an agreement with Spotify to enhance audio-visual streaming and introduce a direct licensing model with Warner Chappell Music in several countries[24] - Warner Music Group acquired a controlling stake in Tempo Music Investments, which is expected to provide additional high-margin revenue over time[25] - Warner Music Group reaffirmed full-year recorded music subscription streaming revenue guidance[4] Challenges and Future Outlook - The company anticipates ongoing challenges in revenue from Recorded Music Download and Other Digital segments, with a total decline of$ 5 million[44] - The overall performance indicates a need for strategic acquisitions and investments to improve cash flow metrics[45] - The company is focused on enhancing Free Cash Flow as a measure of long-term value generation[46]