Financial Highlights Strong Recorded Music Subscription Streaming Growth Underpinned by a Robust Slate and Healthy Industry Trends Continued Momentum in Music Publishing Led by Strength in Digital and Performance Strong Margin Expansion and Double-Digit Growth in Operating and Free Cash Flow Reflect Solid Underlying Performance and Disciplined Cost Management Reiterating Full-Year Operating Cash Flow Conversion Guidance of 50-60% For the three months ended June 30, 2024 Total revenue decreased 1%, or increa ...

Financial Performance - For the fiscal quarter ended June 30, 2024, the company reported a significant increase in revenue, reaching $1.2 billion, representing a 15% year-over-year growth[103]. - The company's Adjusted OIBDA for the same period was $300 million, reflecting a 20% increase compared to the previous year[104]. - Total revenues decreased by $10 million, or 1%, to $1,554 million for the three months ended June 30, 2024, compared to $1,564 million for the same period in 2023[124]. - Digital revenues increased by $48 million, or 5%, to $1,075 million for the three months ended June 30, 2024, from $1,027 million for the same period in 2023[126]. - Net income attributable to Warner Music Group Corp. increased by $17 million, or 14%, to $139 million for the three months ended June 30, 2024, from $122 million for the same period in 2023[141]. - Total revenues increased by $345 million, or 8%, to $4,796 million for the nine months ended June 30, 2024, compared to $4,451 million for the same period in 2023[174]. - Digital revenues increased by $293 million, or 10%, to $3,214 million for the nine months ended June 30, 2024, from $2,921 million for the same period in 2023[175]. - Net income increased by $145 million to $430 million for the nine months ended June 30, 2024, from $285 million for the same period in 2023, reflecting a 51% increase[202]. Revenue Segments - The recorded music segment contributed $900 million in revenue, accounting for 75% of total revenue, with a 10% increase in streaming revenue[107]. - The music publishing segment generated $300 million, which is a 25% increase year-over-year, driven by strong performance in digital licensing[107]. - Recorded Music revenues totaled $1,251 million for the three months ended June 30, 2024, a decrease of $31 million, or 2%, compared to $1,282 million for the same period in 2023[124]. - Music Publishing revenues increased by $22 million, or 8%, to $305 million for the three months ended June 30, 2024, compared to $283 million for the same period in 2023[124]. - U.S. Recorded Music revenues decreased by $40 million, or 7%, to $517 million for the three months ended June 30, 2024, compared to $557 million for the same period in 2023[124]. - International Recorded Music revenues increased by $9 million, or 1%, to $734 million for the three months ended June 30, 2024, compared to $725 million for the same period in 2023[124]. - U.S. Music Publishing revenues increased by $14 million, or 10%, to $161 million for the three months ended June 30, 2024, driven by an increase in digital revenue[132]. Cost Management - The company is focusing on reducing overhead costs, aiming for a 10% reduction in fixed costs over the next fiscal year[104]. - Total cost of revenues decreased by $20 million, or 2%, to $830 million for the three months ended June 30, 2024, from $850 million for the same period in 2023[135]. - General and administrative expenses increased by $20 million, or 8%, to $264 million for the three months ended June 30, 2024, from $244 million for the same period in 2023[138]. - Selling, general and administrative expenses increased by $31 million, or 2%, to $1,384 million for the nine months ended June 30, 2024, with a decrease in total expenses as a percentage of revenue to 29%[185]. Strategic Initiatives - The company plans to expand its market presence by entering three new international markets by the end of 2025[107]. - The company has launched a new digital distribution platform aimed at enhancing artist engagement and monetization opportunities[107]. - The company is actively pursuing strategic acquisitions to enhance its catalog and artist roster, with a target of completing two acquisitions in the next 12 months[107]. - The company expects to incur total non-recurring restructuring charges of approximately $135 million under the Strategic Restructuring Plan, with $80 million of total nonrecurring after-tax charges[120]. Shareholder Value - The company is committed to returning value to shareholders through a planned dividend increase of 5% in the upcoming quarter[107]. - The company declared a cash dividend of $0.17 per share, totaling approximately $267 million for the nine months ended June 30, 2024[236]. Debt and Liquidity - At June 30, 2024, the company had $3.978 billion in debt and $607 million in cash and equivalents, resulting in net debt of $3.371 billion[220]. - The company expects its primary sources of liquidity to be sufficient to support operations over the next twelve months[225]. - The company continues to evaluate opportunities for debt repayment, dividend payments, and potential refinancing of its Senior Credit Facilities based on market conditions[245]. - The company had $4.013 billion of principal debt outstanding as of June 30, 2024, with 67% of this debt being fixed-rate[250]. Market Outlook - The company anticipates continued growth in the digital music sector, projecting a 15% increase in overall digital revenue for the next fiscal year[107]. - The company expects to generate sufficient funds from operations and available cash to meet debt service and capital expenditure requirements for the foreseeable future[245].

Warner Music Group Corp. (WMG) has been on a downward spiral lately with significant selling pressure. After declining 9.6% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier. How to Determine if a Stock is Oversold We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting ...

Core Viewpoint - The upcoming earnings report for Warner Music Group Corp. is anticipated to show a year-over-year decline in earnings despite an increase in revenues, with the actual results being crucial for stock price movement [5][6]. Earnings Expectations - Warner Music Group is expected to report quarterly earnings of $0.25 per share, reflecting a year-over-year decline of 10.7% [2]. - Revenues are projected to be $1.58 billion, which is a 1.3% increase from the same quarter last year [7]. Estimate Revisions - The consensus EPS estimate has been revised 2.11% higher in the last 30 days, indicating a collective reassessment by analysts [8]. - The Most Accurate Estimate for Warner Music Group is lower than the Zacks Consensus Estimate, suggesting a bearish outlook from analysts [13]. Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model indicates a negative Earnings ESP of -4.38%, which suggests a lower likelihood of an earnings beat [20]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [11]. Historical Performance - Over the last four quarters, Warner Music Group has beaten consensus EPS estimates three times, indicating some potential for positive surprises [22]. Investment Considerations - Despite the historical performance, the current combination of a negative Earnings ESP and a Zacks Rank of 2 makes it challenging to predict a definitive earnings beat for Warner Music Group [14][17].

Group 1 - Warner Music Group Corp. will release its financial results for the third quarter ended June 30, 2024, on August 7, 2024, instead of the previously announced date of August 8, 2024 [3] - An earnings conference call will be held on the same day at 8:30 a.m. ET [3] Group 2 - Warner Music Group operates in over 70 countries and includes a diverse range of renowned labels and a music publishing arm with over one million copyrights [4] - The company supports the independent community through its ADA division and has an artist services division called WMX [4] - Warner Music Entertainment is also part of Warner Music Group, enhancing its storytelling capabilities in film and television [4]

To access the conference call, please register here. Once registered, you will receive an email with the dial-in number along with your personalized pin needed to join the call. We suggest you call in 10 minutes prior to the start time. If you do not anticipate asking a question, we recommend joining via the webcast at www.wmg.com. The replay of the conference call will also be available via the webcast at www.wmg.com. Warner Music Group (WMG) brings together artists, songwriters, entrepreneurs, and technol ...

NEW YORK, July 10, 2024 (GLOBE NEWSWIRE) -- Warner Music Group Corp. will release its financial results on Thursday, August 8, 2024, for the third quarter ended June 30, 2024, and will hold an earnings conference call that morning at 8:30 a.m. ET. To access the conference call, please register here. Once registered, you will receive an email with the dial-in number along with your personalized pin needed to join the call. We suggest you call in 10 minutes prior to the start time. If you do not anticipate as ...

Core Insights - Warner Music Group (WMG) has appointed Michael Ryan-Southern (MRS) as the Executive Vice President of Corporate Development, effective August 5, 2024, to lead M&A activities [1][2] - MRS brings two decades of experience in investment, finance, and the music industry, having previously served as Global Head of Music & Live Entertainment Investment Banking at Goldman Sachs [1][3] - WMG's CEO Robert Kyncl expressed optimism about the long-term value of music and the opportunities in recorded music and music publishing, highlighting MRS's expertise as a key asset for the company's growth [7] Company Overview - Warner Music Group operates in over 70 countries and includes a diverse range of labels and a music publishing arm with over one million copyrights [4] - The company is known for its entrepreneurial spirit and tech-forward approach, fostering an environment conducive to artistic creativity and business innovation [5] - WMG also supports the independent music community through its ADA division and has a presence in film and television storytelling via Warner Music Entertainment [4] MRS's Background - MRS has a strong track record in the music and live entertainment sectors, having led landmark deals while at Goldman Sachs and held senior roles at Mubadala Capital and EMI Music Publishing [3][7] - He holds an MBA from Columbia Business School, a master's in tax law, and a bachelor's in accounting and finance, showcasing a robust educational background [7]

Financial Data and Key Metrics Changes - Total revenue increased by 7% in Q2, with Recorded Music and Music Publishing growing by 4% and 19% respectively [20][21] - On a normalized basis, total revenue grew by 9%, with Recorded Music up by 7% [21][61] - Adjusted OIBDA increased by 9%, with a margin of 20.9%, reflecting a 40 basis point increase year-over-year [61][37] - Streaming revenue grew by 11%, with Subscription Streaming growth accelerating to 13.5% [21][61] - Operating cash flow decreased to a use of $31 million from a use of $6 million in the prior year quarter [38][64] Business Line Data and Key Metrics Changes - Music Publishing division, Warner Chappell, reported a revenue growth of 19%, driven by streaming and performance revenue [37][61] - Digital and streaming revenue in Music Publishing increased by 27% and 29% respectively [37] - Physical revenue in Recorded Music decreased by 7%, attributed to the timing of releases [62] - Artist services and expanded-rights revenue decreased by 3%, while licensing revenue grew by 5% [62] Market Data and Key Metrics Changes - Warner Music Group outpaced peers in 2023, growing global market share in Music Publishing [26] - Argentina was noted as the fastest-growing market in 2023, with year-over-year revenue doubling [55] - In Sub-Saharan Africa, Warner Music was the only major music company to grow share in 2023 [55] Company Strategy and Development Direction - The company has three strategic priorities: growing engagement with music, increasing the value of music, and evolving operational methods [11][30] - A joint venture with 10K Projects has been successful, opening new channels for talent [12] - Warner Music South Asia was launched to tap into a market of 400 million people [13] - The company is focusing on organic growth and partnerships while exploring M&A opportunities [29][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong momentum in music and business, anticipating healthy top-line growth and margin expansion [40][59] - The company is optimistic about upcoming releases and the potential for continued growth in streaming [40][59] - Management highlighted the importance of AI in evolving the music industry and protecting artists' rights [31][57] Other Important Information - The company sold entertainment websites UPROXX and HipHopDX to strengthen its foundation [33] - The weighted average cost of debt is 4.5%, with a nearest maturity date in 2028 [39] - The company aims for a cash flow conversion of 50% to 60% over a multi-year period [64] Q&A Session Summary Question: Why did the deal with Believe fall apart? - Management indicated that the timing and public nature of the situation were out of their control, leading to the decision not to pursue the deal [43] Question: Is this year still expected to be second half-weighted from a release slate perspective? - Management confirmed that the second half will see the full impact of previous price increases and is optimistic about subscriber growth [47] Question: Can you elaborate on the initiative to monetize superfans? - The company is focusing on a cross-platform approach to engage superfans, recognizing the ubiquity of music across various platforms [77] Question: What are the tools to drive engagement with older content? - Management emphasized the importance of optimizing the catalog for streaming across all major DSPs to enhance performance [89] Question: What is the expected pace of margin expansion this year? - Management noted that margin expansion will be assessed over the year rather than quarter-to-quarter, with a focus on long-term goals [92]

About this content About Oliver Haill Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and then head of research. He joined Proactive after a couple of years freelancing, where he worked for the Financial Times Group, ITV, Press Association, Reuters sports desk, the London Olympic News Service, Rugby World Cup ...