Universal Music Revenue Beats Forecasts Amid Subscriptions Growth — Update

By Mauro Orru

Universal Music Group posted revenue above analysts' expectations for the second quarter, lifted by growth in subscriptions and price increases from streaming platforms.

The record label behind Taylor Swift, Billie Eilish and Ariana Grande reported revenue of 2.93 billion euros ($3.18 billion) for the three months to the end of June, up 9.6% on year at constant currency. Analysts had forecast revenue of EUR2.89 billion, according to consensus estimates compiled by Visible Alpha.

Taylor Swift, Billie Eilish, Seventeen, Morgan Wallen and Ae! group were among the top sellers for the quarter.

Universal said revenue from subscriptions increased 6.9% at constant currency to EUR1.14 billion, citing growth in its global subscriber base and the benefit of price increases across streaming platforms.

Spotify Technology, Apple and Amazon.com all raised prices for their music streaming services in recent years, bringing in additional subscriptions revenue for record labels like Universal.

However, streaming revenue contracted 3.9% at constant currency to EUR343 million due to what Universal said was slowing growth at some of its advertising-based platform partners and inconvenient deal-renewal timings with certain platforms.

Universal's physical revenue, which includes CD and vinyl sales, grew more than 14% at constant currency to EUR357 million thanks to a favorable release schedule that fuelled vinyl sales in the U.S. and Europe.

Adjusted earnings before interest, taxes, depreciation and amortization--a key profitability metric for Universal--climbed to EUR649 million from EUR590 million, generating a 22.1% adjusted margin. Analysts had forecast EUR645.4 million in adjusted Ebitda, according to Visible Alpha.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

July 24, 2024 12:36 ET (16:36 GMT)

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