WArner musics big bet paid off
Warner Music Group has today revealed its Q2 earnings for the three-month period ending March 31, with total revenues up 10.7% year-on-year from $745 million to $825m (12.7% in constant currency).
The major’s revenue growth was driven by an uptick in revenues across both its recorded music (10.5%) and publishing (14.2%) operations.
Overall operating income was $78 million, compared to $52 million in the prior-year quarter, with OIBDA increasing 11.0% to $141 million from $127m year-on-year and OIBDA margin rose 0.1 percentage point to 17.1% from 17.0% in the prior-year quarter. The increase in OIBDA margin was attributed to revenue mix, which was partially offset by higher variable compensation expense. Adjusted OIBDA rose 13.2% and adjusted OIBDA margin was up 0.4 percentage points to 17.7% as a result of the same factors that impacted OIBDA and OIBDA margin. Net income totaled $20m, compared to $12m in Q2 2016, and adjusted net income was $25m, compared to $14m in the prior-year quarter. Top sellers during the quarter included Ed Sheeran, Bruno Mars, Kyosuke Himuro, twenty one pilots and the Hamilton original cast album. Recorded Music operating income was $69 million up from $38m in the prior-year quarter, and operating margin was up 4.0 percentage points to 10.1% versus 6.1% in the prior-year quarter driven by revenue growth. quarter with Adjusted OIBDA margin up 1.6 percentage points to 16.9%. “We had another excellent quarter, with double-digit growth in both the current and prior-year quarters,” said Steve Cooper, Warner Music Group’s CEO. “Our streaming revenue is now double that of physical and triple that of downloads. An improved industry environment is helping, but we continue to outperform our competition due to fantastic new music and outstanding execution by our operators around the world.” “This was a very strong quarter, marking the 7th consecutive quarter of year-over-year revenue growth,” added Eric Levin, Warner Music Group’s EVP and CFO. “Although tough comparisons could make for a more challenging second half, I’m confident we’ll have another great full fiscal year.” Nick Note: Another big winner far exceeding all estimates…..