Universal Music Group has announced its financial results for the third quarter and nine months ended September 30, 2024.

“Even as we continue to grow revenue and Adjusted EBITDA, we are already making progress on the strategic initiatives we outlined at our recent Capital Markets Day,” said Sir Lucian Grainge, UMG’s Chairman and CEO. “We continue to advance our Artist-Centric strategy, a key pillar of our work to evolve streaming’s underlying business model, or what we call ‘Streaming 2.0’. Through these initiatives, we are setting the stage for a new wave of streaming growth and new opportunities to UMG, its artists, songwriters and shareholders.”

Boyd Muir, UMG’s EVP, CFO and President of Operations, said, “Our focus remains on maximizing the long-term value of the business. The diversity of our revenue is not only driving attractive results in revenue and Adjusted EBITDA growth for UMG this quarter, but also positioning the company for strong continued growth in the coming years.”

Q3 2024 Results

Revenue for the third quarter of 2024 was €2,870 million, an increase of 4.3% year-over-year, or 4.9% in constant currency. As previously disclosed, revenue in the third quarter of 2023 included a €53 million benefit in Music Publishing from the accrual for a catch-up payment from certain digital service providers related to the Copyright Royalty Board Phonorecords III ruling in 2023 (the “CRB Phonorecords III Accrual”). Excluding this item, revenue grew 6.3% year-over-year, or 7.0% in constant currency.

UMG’s Recorded Music, Music Publishing and Merchandising and Other segments all contributed to the revenue growth in the quarter, as discussed further below.

EBITDA for the quarter increased 16.3% year-over-year, or 17.8% in constant currency, to €556 million and EBITDA margin was 19.4%, compared to 17.4% in the third quarter of 2023. EBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of €65 million during the third quarter of 2024, compared to €103 million during the third quarter of 2023. Excluding non-cash share-based compensation expenses, Adjusted EBITDA for the quarter was €621 million, up 6.9% year-over-year, or 8.2% in constant currency. Adjusted EBITDA margin increased 0.5 percentage points to 21.6%, compared to 21.1% in the third quarter of 2023, driven by operating leverage and cost savings.

EBITDA and Adjusted EBITDA in the third quarter of 2023 included an €11 million benefit in Music Publishing from the CRB Phonorecords III Accrual. Excluding this item, Adjusted EBITDA was up 8.9% year-over-year, or 10.3% in constant currency, as a result of revenue growth and cost savings. The CRB Phonorecords III Accrual did not impact Adjusted EBITDA margin or margin expansion.

YTD 2024 Results

In the nine months ended September 30, 2024, UMG’s revenues of €8,396 million increased by 6.3% year-over-year, or 7.4% in constant currency, compared to the nine months ended September 30, 2023. This increase was driven by strong improvements across all segments, as discussed further below.

Revenue for the nine months ended September 30, 2023 included the €53 million benefit in Music Publishing from the CRB Phonorecords III Accrual discussed above. Excluding this item, revenue increased 7.0% year-over-year, or 8.2% in constant currency.

For the nine months ended September 30, 2024, EBITDA of €1,626 million increased 30.7% year-over-year, or 33.6% in constant currency, and EBITDA margin was 19.4% compared to 15.7% in the prior year period. EBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of €236 million during the first nine months of 2024, compared to €448 million during the first nine months of 2023. Excluding these amounts, Adjusted EBITDA for the first nine months of 2024 was €1,862 million, up 10.0% year-over-year, or 11.7% in constant currency. Adjusted EBITDA margin increased 0.8 percentage points year-over-year to 22.2%, driven by operating leverage and cost savings.

EBITDA and Adjusted EBITDA for the nine months ended September 30, 2023 included the €11 million benefit from the CRB Phonorecords III Accrual in Music Publishing. Excluding this item, Adjusted EBITDA grew 10.8% year-over-year, or 12.4% in constant currency, driven by revenue growth and cost savings. The CRB Phonorecords III Accrual did not impact Adjusted EBITDA margin or margin expansion.

 

Recorded Music

Q3 2024

Recorded Music revenues for the third quarter of 2024 were €2,146 million, up 5.4% compared to the third quarter of 2023, and up 6.2% in constant currency. Subscription revenue grew 7.6% year-over-year, or 8.2% in constant currency, driven primarily by the growth in global subscribers, as well as price increases at certain platforms. Streaming revenue declined 0.8% year-over-year, but grew 0.3% in constant currency due to mixed performance at advertising-based platform partners as the digital advertising market remains volatile. Physical revenue decreased 2.0% year-over-year, or 0.7% in constant currency, as growth in vinyl sales largely offset a difficult comparison against last year’s strong CD sales in Japan. Downloads and other digital revenue declined 28.8% year-over-year, both as reported and in constant currency, attributable to the continued format shift towards streaming. License and other revenue increased 20.4% year-over-year, or 21.7% in constant currency, due to improvements in synchronization income, greater live and brands income and increased direct-to-consumer related activities. Top sellers for the quarter included Taylor Swift, Sabrina Carpenter, Billie Eilish, Chappell Roan and Post Malone, while top sellers in the prior-year quarter included Taylor Swift, SEVENTEEN, Morgan Wallen, Olivia Rodrigo and King & Prince.

YTD 2024 Results

In the nine months ended September 30, 2024, Recorded Music revenues were €6,335 million, up 4.9% year-over-year, or 6.3% in constant currency. Subscription revenue of €3,397 million grew 8.2% year-over-year, or 9.2% in constant currency, driven primarily by the growth in global subscribers as well as the continued benefit of price increases at certain platforms. Streaming revenue of €1,039 million grew 0.9% year-over-year, or 1.8% in constant currency as the digital advertising market remains volatile. Physical revenue declined 3.5% year-over-year, but was in line with last year in constant currency, as growth in vinyl sales in the U.S. and Europe offset a difficult comparison against last year’s strong CD sales in Japan. Downloads and other digital revenue decreased 21.8% year-over-year, or 21.4% in constant currency, attributable to the continued format shift towards streaming. License and other revenue improved 13.0% year-over-year, or 14.2% in constant currency driven by improvements in synchronization income, greater live and brands income and increased direct-to-consumer related activities. Top sellers included Taylor Swift, Billie Eilish, Morgan Wallen, Sabrina Carpenter and Noah Kahan, while top sellers in the prior year included King & Prince, Taylor Swift, Morgan Wallen, Karol G and Metro Boomin.

Music Publishing

Q3 2024

Music Publishing revenue amounted to €500 million in the third quarter of 2024, up 1.8% year-over-year, or 2.2% in constant currency. Music Publishing revenue in the third quarter of 2023 included the €53 million benefit from the CRB Phonorecords III Accrual. Excluding this item, Music Publishing revenue was up 14.2% year-over-year, or 14.7% in constant currency.

Within Music Publishing, digital revenue grew 0.3% year-over-year, or 0.7% in constant currency. Excluding the CRB Phonorecords III Accrual, digital revenue grew 22.4% year-over-year, or 22.9% in constant currency, reflecting continued growth of streaming and subscription revenue. Performance revenue declined 4.7% year-over-year, or 3.8% in constant currency as a result of lower collections in parts of Europe. Synchronisation revenue increased 16.4% year-over-year, or 18.5% in constant currency driven by growth in advertising campaigns in the U.S. and Europe. Mechanical revenue increased 12.0% year-over-year both as reported and in constant currency as a result of improved physical sales.

YTD 2024 Results

In the nine months ended September 30, 2024, Music Publishing revenue amounted to €1,508 million, up 9.3% year-over-year, or 10.0% in constant currency. Music Publishing revenue in the nine months ended September 30, 2023 included the €53 million benefit from the CRB Phonorecords III Accrual. Excluding this item, Music Publishing revenue grew 13.6% year-over-year, or 14.4% in constant currency.

Within Music Publishing, digital revenue grew 12.8% year-over-year, or 13.4% in constant currency. Excluding the CRB Phonorecords III Accrual, digital revenue grew 20.9% year-over-year, or 21.6% in constant currency, driven by growth in streaming and subscription revenue. Performance revenue grew 7.5% year-over-year, or 8.6% in constant currency, synchronisation revenue grew 2.2% year-over-year, or 2.7% in constant currency and mechanical revenue grew 2.6% year-over-year both as-reported and in constant currency.

Merchandising and Other

Q3 2024

Merchandising and other revenue in the third quarter of 2024 was €237 million, an increase of 4.4% year-over-year, or 3.5% in constant currency, driven by growth in direct-to-consumer sales and higher touring merchandise sales, partially offset by lower retail sales.

YTD 2024 Results

Merchandising and other revenue of €578 million was up 17.7% year-over-year, or 17.5% in constant currency, driven by the growth in touring merchandise sales and direct-to-consumer sales, partially offset by lower retail sales.

Chief Financial Officer Transition

Universal Music Group EVP, CFO and President of Operations Boyd Muir has been promoted to the newly created role of Chief Operating Officer (COO) of UMG, continuing to report directly to Sir Lucian Grainge, UMG´s Chairman and CEO. The Company is immediately initiating an executive search process to identify a new CFO. Until such time as a new CFO is appointed, Mr. Muir will serve as both COO and CFO. Mr. Muir has served as CFO of UMG since 2010 and was previously CFO for Universal Music Group International for 11 years.

“Boyd has done an outstanding job leading UMG’s global financial functions through a period of unprecedented growth and change, including our successful listing on the Euronext in 2021, and our last three years as a stand-alone public company,” said Sir Lucian Grainge, UMG´s Chairman and CEO. “Now, as we turn to executing on the vision we outlined at our recent Capital Markets Day, as Chief Operating Officer, Boyd will focus on helping us drive the transformation of several of our key worldwide operations to ensure we deliver on our strategic plan.”