Warner Music Group (NASDAQ:WMG) Releases Earnings Results, Beats Estimates By $0.17 EPS

Warner Music Group (NASDAQ:WMG) posted its quarterly earnings results on Wednesday. The company reported $0.51 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.34 by $0.17, FiscalAI reports. The business had revenue of $1.86 billion during the quarter, compared to the consensus estimate of $1.81 billion. Warner Music Group had a net margin of 6.34% and a return on equity of 62.01%. Warner Music Group’s revenue was up 10.4% compared to the same quarter last year. During the same quarter last year, the firm posted ($0.03) EPS.

Here are the key takeaways from Warner Music Group’s conference call:

• Positive Sentiment: Warner Music reported strong Q3 momentum, with adjusted revenue up 11%, Adjusted OIBDA up 18%, and Adjusted EPS up 21%; operating cash flow increased 209% and cash rose by roughly $100 million.
• Positive Sentiment: Recorded-music subscription streaming revenue grew 12%, driven by 6%–7% subscriber growth, approximately 3.5 percentage points from pricing, and about 1 percentage point from market-share gains. Contractual wholesale price increases now cover 88% of subscription-streaming revenue, and management expects a slight acceleration in Q4, including the Apple deal.
• Positive Sentiment: Management reaffirmed its targets for high-single-digit revenue growth, double-digit Adjusted OIBDA and EPS growth, and 50%–60% operating-cash-flow conversion. The company remains on track for the high end of its 150–200 basis-point fiscal 2026 margin-expansion target, supported by cost savings, catalog growth, and operating leverage.
• Neutral Sentiment: Warner said AI licensing partnerships, including Suno, are expected to contribute materially to subscription-streaming revenue beginning in fiscal 2027, while the company continues working through complex artist permissioning and safeguards against unauthorized AI content. Armin Zerza’s departure as CFO led to an interim appointment for Lou Dickler, with a permanent CFO search underway.

Warner Music Group Stock Up 0.8%

Shares of NASDAQ WMG traded up $0.20 during trading on Wednesday, hitting $26.00. The stock had a trading volume of 2,718,909 shares, compared to its average volume of 2,379,049. Warner Music Group has a 12 month low of $23.34 and a 12 month high of $35.42. The company has a debt-to-equity ratio of 5.62, a current ratio of 0.73 and a quick ratio of 0.71. The company has a market capitalization of $13.56 billion, a PE ratio of 30.59, a PEG ratio of 0.36 and a beta of 1.30. The firm has a fifty day moving average of $28.25 and a two-hundred day moving average of $28.75.

Warner Music Group Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, June 2nd. Shareholders of record on Tuesday, May 26th were issued a dividend of $0.19 per share. This represents a $0.76 dividend on an annualized basis and a yield of 2.9%. The ex-dividend date of this dividend was Tuesday, May 26th. Warner Music Group’s payout ratio is currently 89.41%.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in the company. Quarry LP bought a new stake in Warner Music Group in the 4th quarter worth about $40,000. Osaic Holdings Inc. lifted its position in shares of Warner Music Group by 480.9% during the 2nd quarter. Osaic Holdings Inc. now owns 1,493 shares of the company’s stock worth $41,000 after buying an additional 1,236 shares in the last quarter. Caitong International Asset Management Co. Ltd boosted its stake in shares of Warner Music Group by 774.6% in the 3rd quarter. Caitong International Asset Management Co. Ltd now owns 1,207 shares of the company’s stock worth $41,000 after buying an additional 1,069 shares during the last quarter. Parallel Advisors LLC boosted its stake in shares of Warner Music Group by 355.7% in the 4th quarter. Parallel Advisors LLC now owns 1,531 shares of the company’s stock worth $47,000 after buying an additional 1,195 shares during the last quarter. Finally, Quadrant Capital Group LLC grew its holdings in shares of Warner Music Group by 740.0% in the fourth quarter. Quadrant Capital Group LLC now owns 1,890 shares of the company’s stock valued at $58,000 after acquiring an additional 1,665 shares in the last quarter. 96.88% of the stock is owned by institutional investors.

Wall Street Analysts Forecast Growth

Several research analysts have weighed in on the stock. Morgan Stanley set a $39.00 price objective on shares of Warner Music Group in a report on Friday, May 8th. Sanford C. Bernstein reissued an “outperform” rating on shares of Warner Music Group in a research report on Friday, May 8th. Wall Street Zen lowered shares of Warner Music Group from a “buy” rating to a “hold” rating in a report on Saturday, July 18th. UBS Group raised their price target on shares of Warner Music Group from $40.00 to $42.00 and gave the company a “buy” rating in a research report on Friday, May 8th. Finally, Evercore reiterated an “outperform” rating and set a $43.00 price target on shares of Warner Music Group in a research note on Friday, May 8th. Fourteen investment analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. According to MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $38.43.

Warner Music Group Company Profile

Warner Music Group is a major global music company that operates across recorded music and music publishing. Its recorded-music business comprises a portfolio of well-known labels—including Atlantic, Warner Records and Parlophone—as well as distribution and artist-services operations that support both established and emerging artists. The company’s publishing arm, Warner Chappell Music, manages songwriting catalogs and administers rights for compositions across multiple media, providing licensing for film, television, advertising and other commercial uses.

WMG’s activities span the full music value chain: signing and developing artists, producing and marketing recordings, distributing music through physical channels and streaming platforms, and monetizing rights through licensing, synchronization and neighboring-rights collection.