Warner Music Group (WMG) Q4 2025 earnings summary

Executive summary

• Achieved record-high quarterly revenue in Q4 2025, with double-digit growth in both total revenue and adjusted OIBDA, and the highest year-over-year growth in nearly two years.

• Improved global and U.S. market share, with notable artist achievements such as Cardi B's double platinum album and Twenty One Pilots' top US rock debut.

• Strategic focus on artist development, catalog revitalization, and operational efficiency drove broad-based gains across all regions and divisions.

• Expanded partnerships and innovative deals in AI music creation and technology, including agreements with Udio, Stability AI, and Clay.

• Net income for the quarter rose to $109 million from $48 million year-over-year, while full-year net income declined to $370 million from $478 million, reflecting higher restructuring and impairment charges.

Financial highlights

• Q4 total revenue grew 13%-15% year-over-year, reaching an all-time high, with double-digit growth in both recorded music and music publishing.

• Adjusted OIBDA rose 12%-15% in Q4; full-year adjusted OIBDA grew 1%-8% on an adjusted basis.

• Streaming revenue increased 6%-8% year-over-year; artist services revenue surged 64% in Q4, driven by successful merch campaigns.

• Operating cash flow conversion reached 47%-57% for the year.

• Cash from operating activities and free cash flow declined year-over-year, with capital expenditures up 20% to $139 million.

Outlook and guidance

• Expect strong top-line growth in 2026, bolstered by organic investments, accretive M&A, and contributions from distribution and direct-to-consumer.

• Cost savings plan to deliver $200 million in annualized savings in 2026, increasing to $300 million in 2027.

• Margin expansion of 150-200 basis points targeted for fiscal 2026, with mid- to high-20s margin range as a long-term goal.

• Continued focus on innovative partnerships and regional business realignment to drive future growth.

• AI licensing deals and premium DSP offerings seen as significant future growth drivers.