earnings report
Profitability at K-pop company JYP Entertainment fell in the first quarter due to a lack of large tours and an album release schedule that favored young, developing artists. While revenue reached 140.8 billion KRW ($97 million), up 3% from the prior-year period, operating profit fell 42%. Operating margin — operating income as a percentage of […]
In a year filled with economic uncertainty and instability, iHeartMedia is seeing “generally stable ad spend,” CEO Bob Pittman said during the company’s first quarter earnings call on Monday (May 12).
The radio and podcasting giant had first-quarter revenue of $807 million, up 1.0% from the prior-year period. Excluding political advertising, which was boosted by the 2024 elections, revenue increased 1.8%.
The multi-platform segment, which includes broadcast stations, had revenue of $473 million, down 4%. But Pittman expressed cautious optimism that radio advertisers are remaining with the format. Premiere Radio Networks, which represents national advertising, was up 2% in the quarter. “I think that’s sort of an indication that the bigger advertisers are hanging in there,” he said.
The 1% revenue uptick was a positive for a company that stood to bear the brunt of an advertising slowdown due to U.S. tariff policy. Analysts had expected revenue to decline 1.6% to $786 million.
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iHeartMedia is increasingly a podcast company, and the digital audio group continued to be a growth source. In digital, revenue rose 16% to $277 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 28% to $87 million. The company had a unique podcast audience of 32.7 million and 177 million streams and downloads in March — both No. 1 in the U.S., according to Podtrack.
“We’re beginning to feel the flywheel effect of being the strong number one in podcast publishing. Our podcasting financial discipline and our focus on the high-margin podcast publishing sector continue to fuel what we believe is the most profitable podcasting business in the United States and to accelerate our growth,” said Pittman.
The audio and media division’s revenue fell 14% to $59.3 million due primarily to non-recurring contract termination fees earned by Katz Media last year. The segment’s adjusted EBITDA dropped 33% to $15.8 million.
The company expects its second quarter consolidated revenue to be down in the low single digits compared to the same period last year. April “pacing” was down 2% year over year, according to CFO Rich Bressler. For iHeartMedia to hit its full-year guidance and avoid a possible down advertising market, Bressler added, the company will need “some positive movement in the macro [environment] and improvement to the uncertainty in the back half of the year.”
Shares of iHeartMedia jumped 19.3% to $1.54 in early trading Tuesday (May 13) but had fallen to $1.22, down 5.4%, by midday.
With tourism to the U.S. on shaky ground and consumer sentiment waning, Sphere Entertainment Co. CEO James Dolan says the Sphere venue in Las Vegas is on sound footing.
“There’s a little bit of Chicken Little going on in our economy,” Dolan said during the earnings call on Thursday (May 8), referring to the children’s fable about unfounded warnings that the sky is falling. “Maybe later we’ll see a more substantive reaction from the marketplace, but right now we’re not really seeing it.”
International guests account for 10% of guests to Sphere’s concerts and “a little over” 20% of visitors to Sphere Experience, the viewings of Sphere’s original content, according to Dolan. Even if Las Vegas experiences a decline in tourism, Dolan believes Sphere will be insulated by strong demand for its state-of-the-art performances. “When it comes to concerts,” he said, “demand exceeds capacity, so we have room to absorb any issues.”
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International relations and tariff concerns couldn’t be blamed for the decline in Sphere revenue in the company’s fiscal quarter ended March 31. Instead, it was an issue of fewer events that caused a 12.8% decline in revenue, to $157.5 million, the company’s parent, Sphere Entertainment Co., announced Thursday.
Sphere did show greater operational efficiency in the quarter. Selling, general and administrative expenses fell 12%, and adjusted operating income (AOI) was flat at $13.1 million despite the decline in revenue.
Investors reacted positively, sending shares of Sphere Entertainment Co. as high as $31.43, up 5.5%, on Thursday morning. The share price was up 5.2% to $31.33 in early afternoon trading.
With residencies by The Eagles, Dead & Company and Anyma, Sphere hosted 10 more concerts than the year-ago period. But the Sphere Experience had fewer showings of original content — Postcard From Earth and V-U2 An Immersive Concert Film — compared to the prior-year period. The quarter also had a difficult comparable because Las Vegas hosted the 2024 Super Bowl, which resulted in a record-setting week for Sphere’s advertising, CFO Robert Longer said. Those decreases were partially offset by increases in event-related revenues and the impact of Delta Air Lines’ corporate takeover of Sphere during CES in January.
Total Sphere Entertainment Co. revenue, which includes MSG Networks, fell 13% to $280.6 million. Consolidated AOI fell 25.6% to $36 million. MSG Networks revenue was $123.0 million, down 19% from the prior-year period, which reflects a nearly two-month absence of programming from Altice while the two parties renegotiated a multi-year renewal.
Dolan said he’s confident the company can drive growth this calendar year through “an array of concerts and third-party events,” sponsorships, and driving operational and cost efficiency. While he didn’t provide details on unannounced future residencies, Dolan said Sphere is having discussions with “multiple artists” and has more demand than availability of shows. “The pipeline is very full,” he assured.
Growth in music and concert revenue pushed K-pop company SM Entertainment’s consolidated revenue to 231.4 billion KRW ($159 million), up 5.2% from the prior-year period. Operating profit of 32.6 billion KRW ($22 million) was up 109.6% while operating margin improved to 32.6% from 15.5%. SM’s concert revenue grew 58.0% to 39 billion KRW ($27 million) […]
In the historically slow first quarter, Live Nation’s revenue dropped 11% to $3.38 billion (an 8% decline in constant currency), but adjusted operating income (AOI) fared better, declining 6% (or 0.5% in constant currency) to $341.1 million.
As the U.S. economy teeters and businesses brace for a protracted and uncertain trade war, Live Nation, the world’s largest concert promoter and ticketing company, believes the business will recover from the slow start to the year. CEO Michael Rapino expects 2025 to be “a historic year for live music, with a strong start having us on track to deliver double-digit growth in operating income and AOI this year,” he said in a statement.
The first quarter is relatively slow as concerts are concentrated in clubs and theaters before festivals, stadium and amphitheater shows appear later in the year. In 2024, the first quarter accounted for just 16% of Live Nation’s full-year revenue, and the concerts division received just 15% of its 2024 revenue in the first quarter. The second and third quarters, in contrast, accounted for 59% of 2024 revenue.
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Various financial metrics portend well for a stronger finish to 2025. Through mid-April, event-related deferred revenue — money collected for future concerts — of $5.4 billion was up 24% year-over-year. The 95 million concert tickets sold for Live Nation concerts represented a double-digit increase. On-sale sell-through rates were at or better than the same period last year. Ticketmaster’s primary ticketing volume was up 5% and gross transaction value (GTV) was up 10%.
The various divisions expect to have similar margins to previous years. Concerts’ AOI margin should be consistent with the 3% achieved in 2024. Ticketmaster’s AOI margin should be in the high 30s and sponsorships in the low 60s.
Absent stadium and amphitheater shows that occur later in the year, Live Nation’s concerts business had $2.48 billion in revenue, down 14% (11% in constant currency) from the prior-year quarter, from 22.3 million fans who attended 11,300 events. Concerts’ adjusted AOI improved to $6.6 million from a $1.8 million loss a year earlier.
In the ticketing segment, revenue fell 4% (1% at constant currency) to $695 million, and adjusted AOI of $253.1 million was down 11% (7% in constant currency). Concerts’ primary GTV was up 9%. Of the 78 million fee-bearing tickets, a number that was consistent with the first quarter of 2024, concert tickets were up 4% and accounted for 60% of volume. Non-concert tickets were down 9%.
Sponsorship revenue of $216.1 million was up 2% (9% at constant currency) while the division’s adjusted AOI of $136.0 million was up 5% (11% in constant currency). In the quarter, Live Nation secured new name-in-title sponsorships, including Citizens Live at The Wylie and Synovus Bank Amphitheater at Chastain Park.
Foreign exchange affected AOI by 5% due to Live Nation’s exposure to the Mexican peso and other Latin American currencies. The company expects foreign exchange headwinds to result in low, single-digit impacts to revenue and AOI in the second quarter.
Tencent Music Entertainment surpassed revenue of $1 billion in the fourth quarter, representing an 8.2% increase from the prior-year period, while net profit climbed 47.3% to $284 million.
The Chinese music streaming company operates three music streaming services — Kugou Music, QQ Music and Kuwo Music — as well as WeSing, a karaoke app. In recent years, Tencent Music’s business has become increasingly dominated by its music services as its social entertainment business continues to lose business.
Online music revenue grew 16.1% to $799 million due to music subscription gains and growth in advertising revenue, while music subscription revenue jumped 18% to $552 million in the quarter as the number of subscribers increased 13.4% to 121 million. Additionally, gross margin jumped to 43.6% in the fourth quarter from 38.3% in the prior-year period. The company attributed the improvement to strong growth in music subscriptions and advertising revenue and increased usage of owned content, as well as its adoption of the Super VIP program, a subscription tier that costs five times the normal rate. Monthly average revenue per user (ARPU) grew to 11.1 RMB ($1.52) from 10.7 RMB ($1.47) due in part to the expansion of the Super VIP membership program.
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The social entertainment business has suffered a sharp decline since the Chinese government began cracking down on the use of live-streaming apps to enable gambling in 2021. In the fourth quarter, social entertainment revenue fell 13% to $223 million and mobile monthly active users declined 21.2% to 82 million (the number stood at 223 million at the end of 2020). Monthly ARPU fell 9.7% to 70.4 RMB ($9.64), down from 172.1 RMB ($26.38) at the end of 2020, and paying users slipped 3.8% to 7.7 million.
For the full year, revenue increased 2.3% to $3.89 billion while net profit climbed 36.2% to $974 million, and gross margin improved to 42.3% from 35.3%. Online music revenue grew 25.5% to $2.98 billion while social entertainment revenue fell 36.1% to $912 million. Full-year gross margin improved to 42.3% from 35.3% in 2023.
Tencent Music Entertainment’s music platforms have evolved into one-stop shops that also include audiobooks, merchandise, downloads and live-streaming. In 2024, the company produced physical albums for Xiao Zhan and Lay Zhang and boosted album sales for Esther Yu by providing options to purchase merchandise along with her digital albums. It also partnered with the band Mayday for an online New Year’s Eve concert.
The company also announced a $273 million dividend and a share repurchase program of up to $1 billion over a two-year period that will commence this month. A $500 million share repurchase program announced in March 2023 will conclude this month.
Tencent Music Entertainment’s shares, which trade on both the New York Stock Exchange (NYSE) and the Stock Exchange of Hong Kong, had risen 15.8% to $15.12 on the NYSE at the close of trading on Tuesday.
As iHeartMedia deals with weak advertising trends and another round of layoffs, the country’s largest broadcast radio company will save $200 million in 2025 compared with 2024 and has renegotiated 80% of its long-term debt, the company revealed on Thursday (Nov. 7) in its third-quarter earnings release.
The debt “exchange offers,” which are expected to close by the end of the year, will extend the majority of iHeartMedia’s debt maturities by three years, allow cash interest expense to “remain essentially flat,” and provide for “some overall debt reduction,” CEO Bob Pittman said during an earnings call. “The transaction support agreement marks an important step in our effort to optimize our balance sheet, and it provides the company with the flexibility to remain focused on iHeart’s transformation.”
The disclosure about cost savings and revamped debt comes days after news broke that iHeartMedia had laid off dozens — hundreds, according to one report — of staffers from radio stations around the country. Pittman called the layoffs part of iHeartMedia’s “modernization journey” that will create a flatter organization, eliminate redundancies and make it easier to do business with the company. Those cuts add to three rounds of layoffs in 2020 as the radio business struggled with an advertising slump during the first year of the pandemic.
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Throughout the earnings call, Pittman and CFO/COO Rich Bressler underscored the company’s embrace of technology to make improvements and cut costs. “Technology is the key to increasing our operating leverage and is a constant focus for us,” said Pittman. “It allows us to speed up processes, streamline legacy systems and it enables our folks to create more, better and faster.” Technology alone will reduce annual expenses by $150 million in 2025, he said, while measures taken earlier this year will bring the total annual savings to $200 million.
In explaining how iHeartMedia uses technology to save such a large sum of money, Pittman gave the example of expanding the reach of on-air talent. “What we’re able to do now, because we’ve got technology, is we can take talent we have in any location and put them on the air in another location,” he explained. “So it allows us to substantially upgrade the quality of our talent in every single market we’re in and allows us to project talent into the situations in which you’re going to have the best impact.”
As for the financial performance, iHeartMedia’s third-quarter revenue increased 5.8% to $1.01 billion, meeting the company’s prior guidance of mid-single-digit growth. Excluding political revenue, revenue was up 2.0%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a common measure of operating profitability, was flat at $204 million and fell on the low end of the guidance range of $200 million to $220 million.
At iHeartMedia’s multi-platform group, which includes broadcast stations and radio networks, revenue fell 1.1% to $619.5 million and adjusted EBITDA dipped 20.1% to $129.9 million. Broadcast revenue dropped 1.4% due to lower spot revenue but was helped by an increase in political advertising.
The digital audio group, which includes podcasts and iHeartMedia’s digital service, saw its revenue jump 12.7% to $301 million and its adjusted EBITDA improve 6.8% to $100 million. Podcast revenue grew 11.1% to $114 million. Audio and media services revenue rose 45.3% to $90 million due to the political advertising spending for the recent national and local elections.
iHeartMedia’s Q3 2024 financial metrics:
Revenue: up 5.8% to $1.01 billion
Adjusted EBITDA: flat at $204 million
Net loss: up 360% to $41.3 million
Free cash flow: up 8.4% to $73.3 million
Strong subscription revenue, improved margins and successful new releases by Sabrina Carpenter, Chappell Roan and Post Malone helped Universal Music Group (UMG) post revenue of 2.87 billion euros ($3.16 billion) in the third quarter, up 4.3% year-over-year (4.9% at constant currency).
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached 621 million euros ($683 million), up 8.2% from the prior-year period. The Amsterdam-based company’s adjusted EBITDA margin improved to 21.6% from 21.1% in the prior-year quarter and was helped by cost savings from the organizational redesign announced in February and lower A&R and marketing costs, CFO Boyd Muir said during Thursday’s (Oct. 31) earnings call.
If not for a one-time gain in the prior-year quarter, the revenue growth rate would have been 7.6% and adjusted EBITDA growth would have improved to 10.8%. Last year, Universal Music Publishing Grou (UMPG) recognized the accrual of a catch-up payment from the Copyright Royalty Board (CRB) Phonorecords III ruling. That resulted in revenue of 53 million euros ($58 million) and added 11 million euros ($12 million) to UMPG’s adjusted EBITDA.
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UMG had a typically strong quarter of chart-topping new releases. CEO Lucian Grainge noted during the call that Carpenter’s album Short n’ Sweet, released on Aug. 23, went to No. 1 in 15 countries and topped the Billboard 200 albums chart in the U.S. for four non-consecutive weeks. Elsewhere, Roan’s The Rise and Fall of a Midwest Princess topped Billboard’s Album Sales Chart in September, while Malone’s latest album, F-1 Trillion, debuted at No. 1 on the Billboard 200 and also summited the Top Country Albums chart. Island also has a top 10 hit song in the U.K. with Gigi Perez’s “Sailor Song,” which peaked at No. 28 in the U.S.
The recorded music division improved 5.4% to 2.15 billion euros ($2.36 billion) on the strength of a 7.6% improvement in subscription revenue. Other streaming revenue, however, dropped 0.8% (up 0.3% at constant currency) to 354 million euros ($389 million). Physical sales dropped 2% to 288 million euros ($317 million) while licensing revenue jumped 20.4% to 325 million euros ($357 million). Subscription growth was negatively affected by “just over a percentage point” from “ongoing challenges” in the home fitness subscription market and the departure of the record label 10K Projects to Warner Music Group, said Muir. Lower CD sales in Japan were partially offset by strong vinyl sales, he added, especially in the U.S.
Muir affirmed UMG’s previously announced guidance of an 8% to 10% compound annual growth rate for recorded music subscription revenue through 2028. UMG may not always hit that target range in any given quarter, however, and Muir reminded listeners that the fourth quarter marks one year since a Spotify price increase that has helped UMG — and other record labels — experience a surge in year-over-year subscription growth.
UMPG improved 1.8% (2.2.% at constant currency) to 500 million euros ($550 million). Excluding the CRB accrual, publishing revenue was up 22.4% (22.9% at constant currency). Digital revenue grew 0.3% to 295 million euros ($324 million), synchronization royalties jumped 18.5% to 64 million euros ($70 million) and mechanical revenue climbed 12% to 28 million euros ($31 million). Performance royalties fell 4.7% to 101 million euros ($111 million).
UMG’s Bravado merchandise division had revenue of 237 million euros ($261 million), up 4.4% from the prior-year period. The company attributed the growth to stronger direct-to-consumer sales and higher touring merchandise sales. In the U.S., Bravado benefitted from the touring activity of such artists as Slipknot, Imagine Dragons, Nicki Minaj, blink-182 and Malone, according to Muir.
Helped by paid music subscriptions and a strong performance from its music publishing division, Universal Music Group generated revenue of 2.59 billion euros ($2.8 billion) in the first quarter of 2024, a 5.8% increase (7.9% at constant currency) over the prior-year quarter, the company announced Thursday (May 2).
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Notably, UMG’s margins improved from a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 13.2% to 591 million euros ($640 million). As a percent of revenue, adjusted EBITDA margin was 22.8%, up 1.5 percentage points from 21.3% from the first quarter of 2023.
CFO Boyd Muir attributed the margin improvement to revenue growth and a change in product mix — namely, less physical sales — but during Thursday’s earnings call he cautioned “not to read too much into any one quarter” and urged investors to look at trends over longer periods.
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The quarterly earnings release arrived a day after UMG announced a new licensing deal with TikTok. Analysts probed for insights into the economics of the agreement and possible impacts to UMG’s financial statements. Executives declined to provide details about the deal but insisted it provides fair value relative to other short-form video platforms.
Michael Nash, UMG’s executive vp/chief digital officer, said the new TikTok deal is “a substantial improvement” from the previous one and the revenue “does markedly improve for our last deal.” Some of the deal’s value is difficult to quantify, however. Nash added the new agreement contains “aspects of economic value” — such as ad credits, data and marketing programs — that won’t show up in future financial statements.
Each of the company’s divisions — recorded music, music publishing and merchandise — showed improvements in the first quarter. “This broad-based growth continues to underpin our confidence about the longer-term health of our business,” said Muir.
Subscription services were a main driving force in UMG’s quarter. Recorded-music subscription revenue grew 10.7% to 1.12 billion euros ($1.2 billion) and accounted for 43.3% of total company revenue, up from 41.4% in the fourth quarter of 2023. Recent price increases by Spotify, Apple Music and Amazon Music weren’t the only — or the primary — factor. “Subscriber growth is the biggest driver of the year-over-year growth rates we see at UMG,” said Muir.
Total streaming revenue grew at a slower rate, however, gaining 8.9% to 343 million euros ($371 million). Speaking about ad-supported streaming, Muir said he is “encouraged” by improvements but “cautious” about growth “until we see a consistent broad-based improvement across all partners and across all geographies and probably over a more consistent, longer-term timeframe.”
Total recorded-music revenues grew just 3.4% to 1.99 billion euros ($2.15 billion). Top sellers in the quarter came from Taylor Swift, Noah Kahan, Morgan Wallen, Ariana Grande and Olivia Rodrigo. Physical revenue in the recorded-music segment dropped 18.5% to 255 million euros ($276 million). (Taylor Swift’s The Tortured Poets Society, which sold 859,000 vinyl copies in its first week of release, will impact UMG’s second quarter results.) Muir explained the decrease in physical sales stemmed from particular strong physical sales in Japan in the prior-year quarter. Licensing and other revenue fell 1.8% to 222 million euros ($240 million).
Music publishing revenue jumped 16.7% to 496 million euros ($537 million) thanks to digital revenue’s 22.9% increase to 284 million euros ($307 million). Performance revenue’s 26.7% increase to 114 million euros ($123 million) more than compensated for synch revenue’s decline of 10.1% to 62 million euros ($67 million)
Merchandising revenue grew 6.5% (7.5% at constant currency) to 114 million euros ($123 million). Touring merchandise sales increased while direct-to-consumer sales and retail sales declined.
The company remains on track to realize 75 million euros ($80 million) in cost savings in 2024, said Muir. In February, the company announced a plan to save $270 million annually through organization redesign and layoffs. As part of the redesign, UMG created label operations on the coasts under the leadership of two top executives. On the East Coast, Republic Corps is led by Republic Records co-founder Monte Lipman. On the West Coast, Interscope Capital Labels Group is helmed by John Janick, previously the chairman/CEO of Interscope Geffen A&M.
K-pop giant HYBE posted its lowest total revenue in two years as its recorded music segment sank to its lowest level in seven quarters, the South Korean company announced Thursday (May 2).
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HYBE had first quarter revenue of 360.9 billion won ($271.5 million), down 12.1% year over year and the lowest since posting 285 billion won ($214.4 million) in the first quarter of 2022. Operating profit fell precipitously to 14.4 billion won ($10.8 million), down 72.6% from the prior-year period.
HYBE’s share price was barely affected by the slowest quarter in years. The share price initially rose 1.7% to 205,500 won ($149.23) but my midday had fallen to 201,500 ($146.33), down 0.2%. The stock is down 13.7% year to date, however, and fell 12.6% last week following news that HYBE will report the CEO of its ADOR imprint, Min Hee-jin, to the police for “breach of trust and other related allegations.”
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Earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of profitability that strips out non-cash items, was 39.8 billion won ($29.9 million), down 45% year over year and the lowest since the first quarter of 2021.
Concerts revenue of 44 billion won ($33.1 million) was up 74.5% year over year. Although that was the biggest year-over-year increase of any category, the first quarter of 2023 was abnormally slow. HYBE’s latest quarter was on par with 45.3 billion won ($34.1 million) of concert revenue in the fourth quarter of 2021, the first quarter the company had performances after COVID-19 restrictions shut down the touring industry.
Recorded music, the company’s largest segment at 40.2% of total revenue, fell 21.3% to 145.1 billion won ($109.2 million). HYBE successfully debuted two new groups during the quarter. Sparkling Blue, the debut EP by PLEDIS Entertainment boy band TWS, sold 260,000 units in its first week for and accumulated 500,000 units in the first nine weeks of release. Girl group ILLIT’s EP, Super Real Me, released through BELIFT LAB, sold 380,000 units in its debut week and reached the 500,000-unit mark in just four weeks. The single “Magnetic” debuted at No. 91 on the Billboard Hot 100 singles chart in April.
Merchandising and licensing fell 11.9% to 60.7 billion won ($45.7 million). Contents fared worse, dropping 29.8% to 61.1 billion won ($46 million).
Weverse, HYBE’s social media platform, saw its monthly active users (MAUs) decline for the second quarter. After reaching a peak of 10.6 million MAUs in the third quarter of 2023, MAUs fell to 10.1 million in the fourth quarter and 9.2 million in the first quarter. Both average revenue per paying user and payment amount fell below levels reached in 2022 and 2023; HYBE does not provide specific numbers for either metric.