Propelled by double-digit gains across its recorded music and publishing divisions, Warner Music Group set a record for quarterly revenue of $1.614 billion in its fiscal first quarter ended Dec. 31, 2021, according to the company’s earnings report released Tuesday (Feb. 8). That revenue haul represents 21% growth over the same period last year, fueled by a 19% jump in recorded music revenues and 31% in publishing.
Digital was in the driver’s seat, once again, leaping 21% and accounting for over $1 billion of that revenue haul for the quarter and covering 62.1% of total revenue for the company, compared to 61.8% in the prior-year quarter. The recorded music/publishing split of that digital revenue was $870 million/$133 million, the company said.
Recorded music revenue totaled $1.386 billion for the frame, up 19% year-over-year, and was driven by the digital-leading streaming segment, which totaled $836 million for the quarter, up 21%. Physical revenue grew 12% to $195 million, thanks to continued demand for vinyl and other factors. Artist services and expanded-rights revenue increased 29% to $232 million, reflecting an anticipated bump in merchandising and concert promotion revenue following a COVID-slammed 2020. Licensing revenues grew 11.3% to $89 million, which the company attributed to higher synchronization and other licensing revenue. Per usual, the fly in WMG’s recorded music ointment was the downloads and other digital segment, which fell 20% to $34 million for the frame.
The company offered the caveat that some of its recorded music results were impacted by an extra week of reporting (last year’s earnings arrived on Feb. 1), as well as a new deal with an unnamed digital partner. Adjusting for those items, total revenue was up roughly 18%, while recorded music revenue was up 16% and streaming 17%.
Major sellers during the quarter included Ed Sheeran, Coldplay, Dua Lipa and Silk Sonic.
Looking closely at publishing, Warner Chappell Music grew a whopping 31% to $229 million from $175 million the same quarter last year. Breaking down publishing revenue, digital generated $133 million, up 34% from $99 million from the same period last year. With Hollywood back in the swing of things, synchronization revenues increased to $42 million from $33 million a year before. Mechanical increased to $14 million from $11, thanks to wider business recovery and an increase in physical sales. As a percentage of revenue, digital increased slightly to 58.1% of total publishing revenue versus 56.6% in the prior-year quarter. Performance revenue increased to $38 million from $30 million as bars, restaurants, concerts and live events continued to recover from COVID disruption.
Looking at profit, all those positive metrics helped pump net income for the quarter up 90% to $188 million compared to $99 million in the prior-year quarter, which was impacted by the pandemic. OIBDA (operating income before depreciation and amortization) came in at $320 million versus $267 million in the year-earlier period. Operating income was $239 million compared to $196 million in the prior-year quarter.
“Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger. At the same time, we’ve never had so much opportunity ahead of us,” WMG CEO Steve Cooper said in a statement. “Our creative expertise, global agility, and willingness to experiment set us apart from the competition and solidify our important role across the entire music ecosystem. In the coming year, we look forward to welcoming back huge superstars, breaking new artists and songwriters, and seeking out more innovative ways to bring more music to more people in more places.”
Q1 Highlights (Year-Over-Year)
- Total revenue: $1.614 billion, up 21% y/y
- Recorded music revenue: $1.386 billion, up 19%
- Digital: $870 million, up 20%
- Streaming: $836 million, up 21%
- Physical: $195 million, up 12%
- Artist services: $232 million, up 29%
- Digital: $870 million, up 20%
- Music publishing revenue: $229 million, up 31%
- Digital revenue: $133 million, up 34%
- Net income: $188 million, up 90%
- Operating income: $239 million, up 22%