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, market share gains, and disciplined operating leverage.

• 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.

• Strong operational focus, strategic use of technology and AI, and innovative partnerships, including executive promotions and strategic deals, supported long-term profitability.

• Continued focus on three strategic priorities: growing market share, increasing the value of music, and improving efficiency.

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

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 rose 16% to $433 million, with margin up to 23.2%; Adjusted EPS increased 21% to $0.51.

• Operating cash flow surged 209% to $142 million; cash balance at quarter-end was $618 million, with total debt of $4.71 billion and net debt of $4.09 billion.

• Nine-month revenue was $5.44 billion (+12% YoY); net income for nine months was $556 million.

• Recorded music streaming revenue up 12% (adjusted), music publishing streaming revenue up 14%.

Outlook and guidance

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

• Margin expansion expected at the high end of the 150-200 basis point range for fiscal 2026, with mid-20s margins short-term and high-20s long-term.

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

• Anticipates continued benefit from subscription price increases, new licensing deals, and AI licensing revenue contributions expected in fiscal 2027.

• Management expects sufficient liquidity to support operations for the next twelve months.