NEW YORK (CelebrityAccess) — Warner Music Group Corp. announced the financial results for the first fiscal quarter of 2021 with total revenue up by 4% to $1.35 billion year-over-year.
“Despite the impact of COVID, we generated the highest quarterly revenue in our 17-year history as a standalone company, growing 4% compared to the prior-year period, which was unaffected by COVID,” said Steve Cooper, CEO, Warner Music Group. “The strong double-digit growth in our digital revenue and direct-to-consumer business more than offset the continued disruption to our performance, merchandising, and physical revenue. We have some fantastic new music from amazing artists and songwriters on the way, and we continue to grow our investment in a new generation of talent, as well as inventing bold and memorable ways to impact global culture.”
Revenue gains were driven, unsurprisingly, by Warner’s digital business with revenue for the segment up by 16%, to $852 million. Warner’s music publishing operation saw a modest revenue gain as well, up to $175 million for the quarter, improving by 1% year-over-year.
However, revenue growth was partially offset by declines in physical recorded music, artist services and expanded-rights revenue and in music publishing performance, mechanical and synchronization revenues, which reflects the impact from COVID, WMG said.
Overall net income at WMG fell during the first quarter, posting at just $99 million compared to the $122 million net income Warner reported in the first quarter of 2020. Warner attributed the shortfall to the unfavorable impact of exchange rates, hedging activity, intercompany loans and higher income tax expense in the current quarter compared to Q1 2020, which included the release of $33 million of the company’s U.S. deferred tax valuation allowance on foreign tax credits, which was partially offset by higher operating income, lower interest expense due to refinancing activity and gains on investments.
“We are extremely proud of our first-quarter results, which were highlighted by significant growth over a number of key metrics when compared to a previous record-breaking quarter,” added Eric Levin, Executive Vice President and CFO, Warner Music Group. “While certain areas of our business remain challenged due to COVID, our core streaming business remains strong and our direct-to-consumer destinations and emerging streaming platforms have bolstered our performance. We are well-positioned for long-term growth.”