Warner Music Group (WMG) Q1 2026 earnings summary

Executive summary

• Revenue grew 10% year-over-year to $1.84 billion, with strong performance in both Recorded Music and Music Publishing, and margin expansion driven by cost savings and strategic initiatives including AI partnerships.

• Adjusted OIBDA increased 28% to $463 million, with margin up to 25.2%, and operating income rose 35% to $288 million.

• Operating cash flow grew 33% to $440 million, and free cash flow increased 42% to $420 million.

• Net income declined 27% to $175 million, primarily due to unfavorable currency impacts and lower other income.

• Strategic focus on market share gains, AI and technology investments, and global expansion through partnerships and catalog acquisitions.

Financial highlights

• Total revenue: $1.84 billion (+10% year-over-year, +7% in constant currency); streaming revenue up 12% in Recorded Music and 3% in Music Publishing.

• Adjusted OIBDA: $463 million (+28%), margin up to 25.2%; operating income: $288 million (+35%).

• Operating cash flow: $440 million (+33%); free cash flow: $420 million (+42%).

• Net income: $175 million (down from $241 million year-over-year); EPS: $0.33 (down from $0.45).

• Cash balance: $751 million; net debt: $3.62 billion; total debt: $4.371 billion.

Outlook and guidance

• 2026 outlook targets 150–200 basis points of margin improvement, driven by investments in core business, expanded monetization, and cost savings.

• The 2025 Restructuring Plan is expected to generate $300 million in annualized pre-tax cost savings by fiscal 2027, with most savings accretive to Adjusted OIBDA.

• Management expects sufficient liquidity to support operations over the next twelve months.

• Material top- and bottom-line growth anticipated from AI partnerships starting in fiscal 2027.

• Strong release slate and contractual DSP price increases to contribute to growth throughout fiscal 2026.