UMG Reports Financial Results for the Second Quarter and Half Year 2026.

July 30, 2026

Universal Music Group N.V. (“UMG” or “the Company”) today announced its financial results for the second quarter and half year ended June 30, 2026.

Sir Lucian Grainge, Chairman and Chief Executive Officer of UMG, said, “We’re delivering on our strategic plan, and working to further sharpen our execution, while capitalizing on the opportunities presented by new technologies and the ever-evolving music ecosystem. Our unique combination of global reach, local expertise, artist development, vast audio and visual IP and entrepreneurial culture positions UMG to deliver long-term growth, sustained value creation, and creative and commercial success for our artists and songwriters.”

“This quarter demonstrated both the strong fundamentals of our business and the opportunities we see to improve,” said Matt Ellis, UMG’s CFO. “Our focus is on building our market leadership, while driving top and bottom-line growth, improving efficiency, and continuing to invest where we see the greatest returns.”

UMG RESULTS

Q2 2026 Results
Revenue for the second quarter of 2026 (“Q2 2026”) grew 13.3% in constant currency, which included the consolidation of Downtown for the entire quarter. Excluding Downtown, revenue grew 6.4% in constant currency with improvement in Recorded Music and Music Publishing primarily driven by:

pricing benefits of Streaming 2.0 agreements;
outsized audiovisual and live and related income within “License and other” revenue;
strong physical sales; and
healthy Music Publishing performance revenue.

Adjusted EBITDA increased 1.5% in constant currency. Excluding Downtown, Adjusted EBITDA was largely flat in constant currency and Adjusted EBITDA margin declined 1.3pp year-over-year due to:

revenue and repertoire mix in Recorded Music;
an increase in corporate overhead, largely due to higher professional fees; and
a loss in Merchandising.

H1 2026 Results
In the half year ended June 30, 2026 (“H1 2026”), UMG’s revenue was up 10.8% in constant currency, and up 5.7% in constant currency excluding Downtown, with improvements in Recorded Music and Music Publishing, partially offset by a decline in Merchandising, as discussed further below.

Cost of revenues, consisting of artist and product costs, increased by €281 million to €3,622 million in H1 2026. Cost of revenues as a percentage of revenue increased to 58.5% in H1 2026 from 56.8% in H1 2025. Excluding Downtown, cost of revenues was 57.1% of sales in H1 2026, driven by higher product costs.

Artist costs increased to €3,045 million, or 49.2% of sales in H1 2026 from €2,795 million, or 47.5% of sales in H1 2025, due to the consolidation of Downtown. Excluding Downtown, artist costs declined to 47.3% of sales in H1 2026.
Product costs increased to €577 million in H1 2026 from €546 million in H1 2025 while remaining consistent as a percentage of sales at 9.3%. Excluding Downtown, product costs grew to 9.8% of sales in H1 2026 due to a greater proportion of phycial sales as well as costs associated with live and related revenues and audiovisual income.

Adjusted EBITDA was up 2.7% in constant currency. Excluding Downtown, Adjusted EBITDA grew 1.6% in constant currency and Adjusted EBITDA margin declined 0.8pp year-over-year due to:

higher contribution from artist and label services revenue within Recorded Music;
an increase in corporate overhead, largely due to higher professional fees; and
a loss in Merchandising.

Operating profit declined 0.6% in constant currency, or 0.8% in constant currency excluding Downtown, to €901 million reflecting:

constant currency Adjusted EBITDA growth;
lower non-cash share based compensation expense; and
lower restructuring charges; more than offset by
an increase in software-related amortization and lease-related depreciation expense; and
higher integration and business transformation costs.

Adjusted net profit, which adjusts for the revaluation of investments in listed and other companies, non-cash share-based compensation expense, amortization of catalogues, and restructuring charges and other items, amounted to €863 million in H1 2026, up 3.9% in constant currency, resulting in Adjusted diluted EPS of €0.47, up 4.3% in constant currency, primarily reflecting:

a decline in operating profit; and
increased interest expense; more than offset by
income from equity affiliates.

For fiscal year 2026, UMG revised how it defines Free Cash Flow to better reflect the cash generated by its business that is available for strategic investments and capital return. Prior periods have been restated to conform with the new definition.

Free cash flow decreased to €24 million in H1 2026 compared to €163 million in H1 2025 due to:

a decline in operating profit;
an increase in cash used for working capital;
higher interest costs; and
higher capital expenditures, largely related to previously disclosed office build-outs at key locations; partially offset by
a decrease in royalty advance payments, net of recoupments, which were €292 million in H1 2026 compared to €377 million in H1 2025, due to the timing of deals and higher recoupment; and
favorable non-cash adjustments.

In line with UMG’s dividend policy to pay a dividend of at least 50% of adjusted net profit, UMG’s Board of Directors declared an interim dividend for H1 2026 of €432 million, or €0.24 per share. The ex-dividend date will be on October 5, 2026, the record date will be on October 6, 2026 and the payment date will be on October 27, 2026.

Net debt at the end of H1 2026 was €4,131 million compared to €2,390 million at the end of 2025 due to:

cash used for investing activities of €806 million, including the acquisition of Downtown;
stock repurchases amounting to €734 million between March 31, 2026 up to and including June 30, 2026; and
dividend payments of €514 million; partially offset by
proceeds of €379 million from the sale of Spotify shares.

Recorded Music

Q2 2026
Recorded Music revenue grew 16.2% in constant currency, and grew 8.7% in constant currency excluding Downtown:

Subscription revenue grew 16.6% in constant currency, and grew 6.7% in constant currency excluding Downtown. Wholesale price increases contributed 3.5pp to the growth rate, partially offset by a 1.5pp negative impact of market share headwinds from Q1 2026 extending into Q2 2026. A stronger Q2 2026 release schedule resulted in market share improvement over the course of the quarter.
Streaming revenue increased 11.5% in constant currency, and grew 1.7% in constant currency excluding Downtown, as consumers continue to shift consumption from better monetized video platforms to short-form platforms.
Downloads and other digital revenue declined 43.3% in constant currency, and declined 50.7% in constant currency excluding Downtown, due to a previously disclosed settlement with an internet service provider in Q2 2025, and the ongoing industry-wide format shift.
Physical revenue increased 15.9% in constant currency, and grew 15.6% in constant currency excluding Downtown, with particular strength in the U.S. and Europe, partially offset by declines in Japan due to the timing of releases.
License and other revenue increased 34.9% in constant currency, or 32.7% in constant currency excluding Downtown, with outsized contributions from audiovisual and live and related income, along with healthy licensing revenue growth.

Recorded Music Adjusted EBITDA was up 2.8% in constant currency, or 1.6% in constant currency excluding Downtown. Recorded Music Adjusted EBITDA margin excluding Downtown declined 1.8pp in Q2 2026, reflecting:

a higher contribution of artist and label services revenue in Recorded Music due to strong growth in Virgin Music Group; and
a greater proportion of physical sales and lower-margin audiovisual and live and related income.

Music Publishing

Q2 2026
Music Publishing revenue grew 9.8% in constant currency, and grew 2.7% in constant currency excluding Downtown:

Digital revenue grew 13.6% in constant currency, and grew 5.2% in constant currency excluding Downtown, reflecting strength in subscription, partially offset by softer ad-supported streaming.
Performance revenue increased 12.8% in constant currency, and grew 9.2% in constant currency excluding Downtown, due to continued industry growth.
Synchronization revenue declined 9.4% in constant currency, and fell by 14.1% in constant currency excluding Downtown, related to the timing of deals.
Mechanical revenue grew 3.6% in constant currency, and declined 3.6% in constant currency excluding Downtown, driven by release schedules.

Music Publishing Adjusted EBITDA was up 3.9% in constant currency, or 1.6% in constant currency excluding Downtown. Music Publishing Adjusted EBITDA margin excluding Downtown declined 0.2pp in Q2 2026 reflecting: