Warner Music Group (WMG) Q3 2026 earnings summary

Executive summary

• Achieved fifth consecutive quarter of meeting or exceeding targets, with robust growth in both recorded music and music publishing, driven by strong subscription streaming, digital, and catalog performance, as well as disciplined operating leverage and cost savings.

• Revenue for the quarter ended June 30, 2026, increased 10% year-over-year to $1.86 billion, with net income of $200 million compared to a net loss of $16 million in the prior-year quarter.

• Adjusted OIBDA rose 16% to $433 million, reflecting operational strength, restructuring savings, and margin expansion.

• Management changes include Armin Zerza stepping down as CFO, with Lou Dickler as Acting CFO and Tom Corson appointed as COO.

• Strategic use of technology and AI, major DSP deal renewals, and M&A activity support continued growth and margin expansion.

Financial highlights

• Total revenue increased 10% year-over-year to $1.86 billion; net income was $200 million, reversing a prior-year loss.

• Adjusted OIBDA grew 16% to $433 million, with margin up to 23.2%; operating cash flow surged 209% to $142 million.

• Recorded music revenue up 9.9%, with subscription streaming up 12.5% and ad-supported streaming up 10%; physical revenue rose 17%.

• Music publishing revenue up 12.2%, with streaming up 14% and mechanical revenue up 19%.

• Cash balance at $618 million, total debt $4.71 billion, net debt $4.09 billion as of June 30, 2026.

Outlook and guidance

• Targets reaffirmed: high single-digit consolidated revenue growth, double-digit Adjusted OIBDA and EPS growth, and 50%-60% operating cash flow conversion.

• Margin expansion expected at the high end of 150-200 basis points for fiscal 2026; targeting mid-20s margins short-term and high-20s long-term.

• Q4 expected to see continued benefit from price increases and new releases, with slightly accelerated performance.

• Anticipates material revenue contributions from AI licensing deals starting fiscal 2027.

• The 2025 Restructuring Plan is expected to generate $300 million in annualized pre-tax cost savings by fiscal 2027.