Warner Music Group Corp.

Total revenue increased 9%, or 11% on an adjusted basis. Recorded music revenue grew 9%, including 12% adjusted subscription streaming growth, 10% adjusted ad-supported streaming growth, 17% physical growth, and 15% growth in artist services and expanded rights; licensing revenue declined 1%. Music publishing revenue rose 11%, with streaming up 14%, sync up 7%, mechanical up 19%, and performance down 2%. Adjusted net income and Adjusted EPS increased 21%. Total company Adjusted OIBDA rose 15% with margin expansion of 100 basis points; adjusted for notable items, Adjusted OIBDA grew 18% with 130 basis points of margin expansion. Operating cash flow increased 209%, the nine-month conversion ratio was 55% of Adjusted OIBDA, cash was $618 million, total debt was $4.7 billion, and net debt was $4.1 billion. Management reiterated targets of high single-digit consolidated revenue growth, double-digit Adjusted OIBDA growth, double-digit Adjusted EPS growth, and 50%-60% operating cash flow conversion, and said it still expects 150 to 200 basis points of margin expansion in fiscal 2026, with mid-20s margins in the short term and high-20s long term.

Robert Kyncl framed the quarter as proof that Warner’s multi-year strategy is working, emphasizing fifth straight quarter of meeting or beating targets. He highlighted three priorities: gaining share, increasing the value of music, and becoming more efficient, pointing to stronger U.S. share, catalog monetization, AI-enabled marketing tools, and new distribution and catalog M&A. His tone was confident and upbeat, but he repeatedly tied that optimism to execution, pricing discipline, and capital allocation rather than one-off wins.

Lou Dickler emphasized that the quarter came in line with or better than the company’s sustainable growth model for the fifth consecutive quarter. He broke down subscription streaming growth as roughly 6%-7% from subscriber growth, about 3.5% from pricing, and roughly 1% from market share, while noting ad-supported growth of 10% was helped by the World Cup and better deal economics and should normalize to mid-single-digit growth in Q4. He also cited 16% recorded music Adjusted OIBDA growth with a 25.3% margin, 14% publishing Adjusted OIBDA growth with a 28.9% margin, 55% operating cash flow conversion over the last nine months, and said the company is on track for $200 million of restructuring savings this year and $300 million annualized in 2027.

Analysts focused on the departure of former CFO Armin Zerza, U.S. market share trends, the Apple renewal, AI licensing deals like Suno and KLAY, margin upside, and the Bain catalog JV. Management said Zerza’s contributions were institutionalized, that U.S. public share data does not show the full global picture, and that the company’s growth has been driven largely organically. On AI, management said Suno remains on track to move to a license model later this year, AI revenue contributions should become material in fiscal 2027, and the operational challenge is mainly permissioning and contract execution rather than philosophical resistance.