Warner Music Group Corp (WMG) Surpasses $6 Billion in Annual Revenue
WMG's total revenue eclipsed $6 billion for the first time in its history, with a 6% increase in Q4 and 2% for the full year.
Q4 net income rose to $154 million, and full-year net income reached $439 million.
Digital revenue growth was robust, with an 8% increase in Q4 and a 3% increase for the full year.
Adjusted OIBDA for Q4 and the full year grew by 20% and 7%, respectively, showcasing strong margin expansion.
On November 16, 2023, Warner Music Group Corp (NASDAQ:WMG) released its 8-K filing, detailing its financial results for the fourth quarter and full fiscal year ended September 30, 2023. The company reported a milestone achievement, surpassing $6 billion in total revenue for the first time, driven by a strong Q4 streaming growth and consistent strength in music publishing.
Fiscal Fourth Quarter Performance
For the fourth quarter, WMG saw total revenue increase by 6%, or 5% in constant currency, with digital revenue climbing 8%, or 7% in constant currency. Net income for the quarter was $154 million, a slight increase from $150 million in the prior-year quarter. Operating income before depreciation and amortization (OIBDA) grew by 19% to $291 million, and adjusted OIBDA, which excludes certain non-recurring items, rose by 20% to $317 million. Despite these gains, cash from operating activities saw a decrease of 17% to $338 million from the prior-year quarter.
Full-Year Financial Highlights
WMG's full-year results also reflected positive trends, with total revenue growing by 2%, or 4% in constant currency. Digital revenue for the year increased by 3%, or 5% in constant currency. However, net income for the year was $439 million, a decrease from $555 million in the prior year. The full-year OIBDA increased by 7% to $1,122 million, and adjusted OIBDA also saw a 7% increase to $1,235 million. The company achieved a robust full-year operating cash flow conversion of 56%, aligning with its target, although cash provided by operating activities decreased by 7% to $687 million from the prior year.
Management Commentary
CEO Robert Kyncl expressed confidence in WMG's performance, stating,
We delivered on our promise of second-half improvement, and reached over $6 billion in annual revenue for the first time in WMGs history."
CFO Bryan Castellani highlighted the quarter's success, attributing it to a solid release slate and momentum in Recorded Music streaming growth. He emphasized the company's disciplined cost management, which resulted in robust adjusted OIBDA growth and margin expansion for the full year.
Recorded Music and Music Publishing Segments
The Recorded Music segment reported a 4% increase in revenue for Q4 and a slight decrease of 0.2% for the full year. Digital revenue within this segment grew by 6% in Q4 and 1% for the full year. The Music Publishing segment showed a remarkable 17% revenue growth in Q4 and a 14% increase for the full year, with digital revenue up by 21% in Q4 and 19% for the full year.
Outlook and Strategic Focus
Looking ahead, WMG is poised to capitalize on favorable industry trends and drive shareholder value through profitable growth and healthy cash flow conversion. The company's strategic focus remains on building a robust WMG that excels in the evolving music industry landscape.
For detailed financial tables and further information on WMG's fiscal fourth quarter and full-year results, readers are encouraged to view the full 8-K filing.
Warner Music Group Corp (NASDAQ:WMG) continues to demonstrate its resilience and adaptability in a dynamic industry, setting the stage for continued success and innovation in the music world.
Explore the complete 8-K earnings release (here) from Warner Music Group Corp for further details.
This article first appeared on GuruFocus.
