Warner Music’s Full-Year Profit Falls Despite Streaming and Recorded Music Growth

Warner Music Group reported a 23% decline in annual profit for the fiscal year ending Sept. 30 as the termination of BMG’s distribution agreement resulted in lower revenue, though higher publishing and recorded music revenues bolstered annual revenues.

WMG’s net income for the 12 months ending Sept. 30 fell to $370 million from $478 million a year ago due to several factors including restructuring costs, the BMG deal ending, and a difficult comparison to the prior year, which included additional revenue from certain deals with artists and streaming partners. Quarterly net income was up, rising to $109 million compared to $48 million in the year-ago fiscal quarter. Operating income fell by $129 million to $694 million compared to $823 million a year ago. 

In the most recent quarter, WMG revenue rose 14.6% to $1.87 billion on double-digit revenue growth from both recorded music and publishing. Recorded music generated $1.53 billion in quarterly revenue, while publishing generated $337 million in quarterly revenue, representing a 15% and 14% increase compared to the year-ago quarter.

The wind-down of BMG’s distribution agreement with Warner’s ADA resulted in an $81 million hit to recorded music revenue, which included $34 million less in streaming revenue and $47 million less in physical revenue for the 12-months ending on Sept. 30. On a quarterly basis, the end of BMG’s deal drove a $10 million negative impact to streaming revenue and a $7 million hit to physical music revenues.

For the full year, publishing revenue increased 7.9% to $1.3 billion, with broad-based growth across performance, digital, mechanical, and synchronization.

Warner said in July it would cut annual costs by $300 million including by trimming staff to save $170 million. The news followed earlier staff cuts of 4% and 10% announced in 2024.

Ahead of its earnings release, WMG announced several AI initiatives. It settled a lawsuit with Udio and said it will co-launch a subscription-based AI music creation platform next year. WMG also partnered with Stability AI to develop pro-grade generative audio tools and just this morning signed a licensing deal with KLAY, an immersive music experience platform.

Here are the highlights: