Warner Music(WMG) - 2024 Q4 - Annual Results

Revenue Performance - Total revenue for the fourth quarter increased by 3% to $1,630 million, while full-year revenue rose by 6% to $6,426 million[1][5]. - Recorded Music revenue for the three months ended September 30, 2024, was $1,338 million, a 4% increase from $1,291 million in the prior year[24]. - Full-year Recorded Music revenue increased by 5.4% to $5,223 million, driven by a 31.2% growth in licensing revenue[30]. - Total revenue for the three months ended September 30, 2024, was $1,630 million, a 3% increase from $1,586 million in the prior year[48]. - For the twelve months ended September 30, 2024, total revenue was $6,426 million, a 7% increase from $6,037 million in 2023[70]. Digital Revenue - Digital revenue remained flat in the fourth quarter but increased by 7% for the full year, reaching $3,800 million[1][16]. - Digital revenue for the same period was $881 million, remaining flat compared to $877 million in the prior year, while streaming revenue increased by 2.1%[25]. - Total digital revenue for the twelve months ended September 30, 2024, increased by 7% to $4,280 million compared to $3,989 million in 2023[54]. - Recorded music digital revenue for the twelve months ended September 30, 2024, was $3,519 million, reflecting a 6% increase from $3,322 million in 2023[54]. - Music publishing digital revenue for the twelve months ended September 30, 2024, rose by 14% to $763 million compared to $669 million in 2023[54]. Income and Profitability - Net income for the fourth quarter was $48 million, down from $154 million in the prior-year quarter, while full-year net income increased by 9% to $478 million[1][19]. - Adjusted OIBDA for the fourth quarter rose by 11% to $353 million, and for the full year, it increased by 16% to $1,432 million[1][18]. - Operating income for the fourth quarter decreased to $143 million, while full-year operating income increased to $823 million[1][17]. - Music Publishing operating income increased to $53 million, with an operating margin of 18.0%, up from 16.4% in the prior year[36]. - The total OIBDA for Warner Music Group Corp. for the twelve months ended September 30, 2024, was $1,150 million, a 2% increase from $1,122 million in 2023[61]. Cash Flow and Balance Sheet - Cash provided by operating activities decreased by 10% to $304 million in the fourth quarter but increased by 10% to $754 million for the full year[1][22]. - Free Cash Flow for the fourth quarter decreased by 10% to $271 million, but increased by 14% to $638 million for the full year[1][22]. - The company reported a cash balance of $694 million and total debt of $4.014 billion as of September 30, 2024[1][12]. - Total current assets increased by 10% to $2,643 million as of September 30, 2024, compared to $2,402 million in 2023[50]. - The company reported a net increase in cash and equivalents of $53 million for the twelve months ended September 30, 2024[52]. Licensing Revenue - The company experienced a 34.7% increase in Recorded Music licensing revenue, primarily due to growth in copyright infringement settlements in the United States[25]. - Licensing revenue for the three months ended September 30, 2024, surged by 33% to $128 million compared to $95 million in Q3 2023[67]. - The company reported a 30% increase in licensing revenue for the twelve months ended September 30, 2024, reaching $501 million compared to $382 million in 2023[73]. Costs and Expenses - Total costs and expenses for the three months ended September 30, 2024, increased by 8% to $1,487 million[48]. - Restructuring and impairments costs rose significantly to $177 million for the twelve months ended September 30, 2024, compared to $42 million in the previous year[61]. - Non-cash stock-based compensation and related costs increased by 17% to $61 million for the twelve months ended September 30, 2024, compared to $52 million in the previous year[61]. Market Outlook - The company anticipates continued growth in subscription streaming and plans to deliver more culture-shaping music in 2025 and beyond[2]. - The company emphasized the importance of constant currency results for evaluating performance, indicating that exchange rates significantly impact revenue comparisons[65].