Warner Music Group Corp. today announced its first-quarter financial results for the period ended December 31, 2025.

“2026 is off to a strong start as our creative success continues to fuel consistent market share growth and financial performance,” said Robert Kyncl, CEO, Warner Music Group. “We have an exciting slate of new music ahead and are leading the charge with AI to drive a step change in value creation for artists, songwriters, and shareholders, ensuring that WMG is well-positioned for long-term success.”

“We are delivering on our promises by combining significant transformation with accelerated growth and profitability, marking our third consecutive quarter of broad-based success,” said Armin Zerza, CFO, Warner Music Group. “By fortifying our core through strategic investments and pioneering ethical AI partnerships, we have established a solid foundation to drive sustainable, long-term value for our artists and shareholders alike. This is just the beginning of our momentum, and we are well-positioned to accelerate our growth even further in 2026.”

Total WMG

Revenue was up 10.4% (or 7.1% in constant currency). Recorded Music revenue was impacted by a digital revenue settlement of $12 million in the quarter and a $7 million downward revenue true-up in the prior-year quarter (the “DSP True-Up and Settlement Payments”). Consistent with prior quarters, Recorded Music revenue growth was also unfavorably impacted by the termination of the distribution agreement with BMG (the “BMG Termination”), which resulted in $6 million less Recorded Music digital revenue compared to the prior-year quarter. Music Publishing revenue was impacted by $17 million of revenue in the prior-year quarter recognized in connection with historical matched royalties that were processed to date by the Mechanical Licensing Collective (the “MLC Historical Matched Royalties”). Excluding these items, total revenue increased 10.8% (or 7.4% in constant currency).

Digital revenue was up 10.0% (or 7.1% in constant currency) and streaming revenue was up 10.7% (or 7.6% in constant currency). Recorded Music streaming revenue increased 12.4% (or 9.1% in constant currency); however, adjusted for the impacts of the DSP True-Up and Settlement Payments of $12 million in the quarter and $7 million in the prior-year quarter, as well as the $6 million impact of the BMG Termination, Recorded Music streaming revenue was up 10.9% (or 7.6% in constant currency). Music Publishing streaming revenue increased 3.4% (or 1.4% in constant currency); however, adjusted for the $17 million impact of the MLC Historical Matched Royalties, Music Publishing streaming revenue was up 12.8% (or 10.4% in constant currency). The increase in total revenue was also driven by higher Recorded Music artist services and expanded-rights and licensing revenue, and growth across Music Publishing synchronization, performance and mechanical revenue, partially offset by lower Recorded Music physical revenue.

Operating income increased 34.6% (or 26.3% in constant currency) to $288 million from $214 million in the prior-year quarter primarily due to the factors affecting Adjusted OIBDA discussed below, partially offset by higher amortization expense of $11 million, an increase in restructuring and impairment charges of $7 million, and the impact of a $5 million net loss on divestitures in the quarter.

Adjusted OIBDA increased 27.5% (or 22.2% in constant currency) to $463 million from $363 million and Adjusted OIBDA margin increased 3.4 percentage points to 25.2% from 21.8% in the prior-year quarter (or 3.1 percentage points from 22.1% in constant currency). The increases include the impact of the DSP True-Up and Settlement Payments of $7 million in the quarter and $4 million in the prior-year quarter, as well as the MLC Historical Matched Royalties of $4 million in the prior-year quarter. Excluding these items, Adjusted OIBDA increased 25.6% (or 20.3% in constant currency) and Adjusted OIBDA margin increased 2.9 percentage points to 24.9% from 22.0% (or 2.6 percentage points from 22.3% in constant currency). The increases in Adjusted OIBDA and Adjusted OIBDA margin were primarily driven by revenue mix, savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business, and favorable movements in currency exchange rates of approximately $25 million.

Net income was $175 million compared to $241 million in the prior-year quarter. The decrease in net income was due to the impact of exchange rates on the Company’s Euro-denominated debt resulting in a $1 million loss in the quarter compared to a $61 million gain in the prior-year quarter, a currency exchange gain on intercompany loans of $1 million in the quarter compared to a $46 million gain in the prior-year quarter, and a realized and unrealized loss on hedging activity of $1 million in the quarter compared to a $15 million gain in the prior-year quarter. The decrease in net income was partially offset by an $18 million decrease in income tax expense, primarily due to a decrease in pre-tax income in the quarter, as well as the factors described above.

Basic and Diluted earnings per share were $0.33 for both the Class A and Class B shareholders due to the net income attributable to the Company in the quarter of $175 million.

As of December 31, 2025, the Company reported a cash balance of $751 million, total debt of $4.371 billion and net debt (defined as total debt, net of deferred financing costs, premiums and discounts, minus cash and equivalents) of $3.620 billion. Total debt includes $303 million of subsidiary debt acquired in the Company’s acquisition of Tempo Music Holdings, LLC (“Tempo Music”) and $4 million in loans outstanding under a Credit and Security Agreement, dated as of June 29, 2025, pursuant to which the lenders have agreed to extend up to $500 million to Beethoven Financing 1, LLC, an indirect subsidiary of the Company. This debt is secured only by certain music rights owned by Tempo Music and Beethoven JV 1, LLC, our joint venture with Bain Capital (“Beethoven”), respectively, and is nonrecourse to the Company and its subsidiaries, other than Tempo Music and Beethoven, respectively.

Cash provided by operating activities increased 33% to $440 million in the quarter compared to $332 million in the prior-year quarter. The increase was largely a result of operating performance. Free Cash Flow, as defined below, increased to $420 million from $296 million in the prior-year quarter, primarily due to the factors affecting cash provided by operating activities described above and due to a decrease in capital expenditures of 44% to $20 million from $36 million in the prior-year quarter, driven by higher investments in technology in the prior-year quarter.

Recorded Music

Recorded Music revenue was up 10.0% (or 6.6% in constant currency) driven by increases across digital, artist services and expanded-rights and licensing revenue, partially offset by a decrease in physical revenue. Excluding the impacts of the DSP True-Up and Settlement Payments of $12 million in the quarter and $7 million in the prior-year quarter, as well as the $6 million impact of the BMG Termination, Recorded Music revenue was up 9.1% (or 5.7% in constant currency). Digital revenue was up 11.8% (or 8.6% in constant currency) and streaming revenue was up 12.4% (or 9.1% in constant currency). Adjusted for the impacts of the DSP True-Up and Settlement Payments of $12 million in the quarter and $7 million in the prior-year quarter, as well as the $6 million impact of the BMG Termination, Recorded Music digital revenue was up 10.3% (or 7.1% in constant currency) and streaming revenue was up 10.9% (or 7.6% in constant currency). Streaming revenue reflects growth in subscription revenue of 14.3% (or 10.9% in constant currency) and in ad-supported revenue of 7.2% (or 3.9% in constant currency). Subscription revenue, adjusted for the impacts of the DSP True-Up and Settlement Payments of $12 million in the quarter and $7 million in the prior-year quarter, as well as the $5 million impact of the BMG Termination, was up 12.0% (or 8.7% in constant currency). Ad-supported revenue, adjusted for the $1 million impact of the BMG Termination, was up 7.7% (or 4.4% in constant currency). The increase in subscription revenue reflects positive market share trends and chart performance, while the increase in ad-supported revenue reflects strong performance in the quarter. Artist services and expanded-rights revenue was up 17.9% (or 12.7% in constant currency) due to higher concert promotion revenue primarily in France, and the favorable impact of foreign currency exchange rates of $9 million. Licensing revenue increased 10.0% (or 7.1% in constant currency) driven by higher licensing activity and a $2 million increase in copyright infringement settlements in the quarter. Physical revenue decreased 8.4% (or 11.1% in constant currency) primarily driven by strong releases in Japan and Korea in the prior-year quarter. Top sellers in the quarter included Alex Warren, sombr, Cardi B, Ed Sheeran, and Teddy Swims.

Recorded Music operating income increased 38.2% (or 31.1% in constant currency) to $329 million from $238 million in the prior-year quarter, and operating margin was up 4.5 percentage points to 22.2% versus 17.7% in the prior-year quarter (or up 4.1 percentage points from 18.1% in constant currency). The increase in operating income and operating income margin was driven by the factors affecting Adjusted OIBDA discussed below, as well as decreases in restructuring and impairment charges of $6 million and depreciation expense of $3 million, partially offset by higher amortization expense of $4 million attributable to acquisitions of music-related assets.

Adjusted OIBDA increased 24.8% (or 19.6% in constant currency) to $403 million from $323 million and Adjusted OIBDA margin increased 3.2 percentage points to 27.2% from 24.0% in the prior-year quarter (or increased 2.9 percentage points from 24.3% in constant currency). The increases include the impact of the DSP True-Up and Settlement Payments of $7 million in the quarter and $4 million in the prior-year quarter. Excluding these items, Adjusted OIBDA increased 21.1% (or 16.1% in constant currency) and Adjusted OIBDA margin increased 2.7 percentage points to 27.0% from 24.3% (or 2.4 percentage points from 24.6% in constant currency). The increases in Adjusted OIBDA and Adjusted OIBDA margin were primarily driven by savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, and favorable movements in foreign currency exchange rates of approximately $18 million.

Music Publishing

Music Publishing revenue was up 12.1% (or 9.4% in constant currency) driven by growth across digital, synchronization, performance, and mechanical revenue. Excluding the impact of the MLC Historical Matched Royalties, Music Publishing revenue was up 18.3% (or 15.3% in constant currency). Digital revenue increased 3.9% (or 1.4% in constant currency) and streaming revenue increased 3.4% (or 1.4% in constant currency). Adjusted for the impact of the MLC Historical Matched Royalties, streaming revenue increased 12.8% (or 10.4% in constant currency) driven by the impact of new deals and renewals. Synchronization revenue increased 53.8% (the same in constant currency) due to higher television and commercial licensing activity, a $3 million increase in copyright infringement settlements, and the $3 million impact of the Company’s acquisition of Tempo Music. Performance revenue increased 14.3% (or 10.3% in constant currency) attributable to growth from concerts, radio and live events. Mechanical revenue increased 28.6% (or 20.0% in constant currency) driven by the timing of distributions.

Music Publishing operating income was up 18.2% (or 16.1% in constant currency) to $65 million from $55 million in the prior-year quarter and operating margin increased 1.0 percentage point to 18.0% from 17.0% in the prior-year quarter (or 1.1 percentage points from 16.9% in constant currency). The increase in operating income was driven by the same factors affecting Adjusted OIBDA discussed below, partially offset by an increase in amortization expense of $8 million in the quarter related to the impact of acquisitions.

Music Publishing Adjusted OIBDA increased 22.9% (or 19.4% in constant currency) to $102 million from $83 million in the prior-year quarter. Adjusted OIBDA margin increased 2.5 percentage points to 28.2% from 25.7% in the prior-year quarter (or 2.4 percentage points from 25.8% in constant currency). The increases in Adjusted OIBDA and Adjusted OIBDA margin were primarily driven by revenue mix and includes the $4 million impact of the MLC Historical Matched Royalties, and favorable movements in foreign exchange rates of approximately $7 million.