WMG Posts $519M Q3 Loss, Net Income Falls 53%
Warner Music Group announced Q3 financial results yesterday with total revenue for the period off by 4.5%.
- Digital revenue grew 11.1% or 13.4% in constant currency
- Total revenue was down 4.5% or 3.1% in constant currency
- Net loss was $519 million versus net income of $14 million in the prior-year quarter
- OIBDA was a loss of $371 million versus income of $124 million in the prior-year quarter
- Adjusted OIBDA was $166 million versus $148 million in the prior-year quarter
- Adjusted EBITDA was $189 million versus $159 million in the prior-year quarter
The loss in revenue came after growth in record music and music publishing digital revenue was more than offset by declines in physical, artist services and expanded-rights and licensing revenue and in Music Publishing performance, mechanical and synchronization revenue.
“slightly better than our expectations, given the sustained effect that COVID “
WMG also reported red ink for the quarter with a net loss of $519 million, down from a net income of $14 million during Q3 2019, while adjusted net income slid by 53% from $38 million in Q3 2019 to $18 million.
Warner cited $426 million paid in non-cash stock-based compensation based on the company’s financial performance following their IPO and one-time cash expenses related to said IPO
Digital Revenue & Music Publishing Up
Digital revenue was still a bright spot, was up 8% year-over-year from 584 million in Q3 2019 to 630 million in 2020.
Revenue form music publishing was up by 4% for the quarter, at $149 million.
“We’re very pleased with our performance this quarter, especially in light of the global pandemic. Our results highlight the underlying strength and resilience of our business. Streaming revenue grew double digits and our digital transformation continues,” said Steve Cooper, CEO, Warner Music Group. “Our commitment to new artist development is illustrated by the fact that four out of our top five best-sellers this quarter were from artists releasing debut or sophomore albums. Our artists and songwriters continue to create music that moves the world including, in the U.S., the most-streamed song of 2020, as well as the No.1 and No. 2 biggest Pop songs during the first half of the calendar year.”
“These results are slightly better than our expectations, given the sustained effect that COVID has had on certain aspects of our business,” added Eric Levin, Executive Vice President and CFO, Warner Music Group. “That’s a testament to the incredible ability of our teams, our artists and our songwriters to pivot and adapt, and to keep the hits coming. We have a robust cash position and all the music and resources needed to come out the other side of this with our long-term prospects as strong as ever.”