NEW YORK (CelebrityAccess) — Warner Music Group reported that revenue and net income slid during the first fiscal quarter of 2023, amid what the label-giant described as a “challenging macroeconomic environment.”
According to WMG’s financial filings, total revenue fell by 8% to $1.488 billion from $1.614 billion during the same period in 2021. WMG’s recorded music operation was a key driver in the revenue shortfall, declining by 11% from 1.386bn in Q1 2022 to 1.239bn in Q1 2023, which the company attributed to lower digital, physical and artist services and expanded-rights revenue. WMG also noted that earnings were impacted by the inclusion of an additional week in last year’s Q1.
Digital revenue was down 7.7%, while streaming revenue was off by Digital revenue was down 6.7% during the quarter.
Music publishing was a bright spot for Warner in Q1, with revenue up by 9% from 229 billion in 2022 to 250 billion during Q1 2023. Revenue growth included WMG’s performance, digital, and sync business, while mechanical royalty revenue remained static at $14 million during Q1.
Net income was $124 million compared to $188 million in the prior-year quarter and adjusted net income was $110 million compared to $223 million in the prior-year quarter.
In his first quarterly earnings report as WMG’s new CEO, Robert Kyncl said: “Music’s value, power, and ubiquity are among the many reasons I decided to join WMG and lead the next phase of our evolution. As we navigate a challenging business environment, we expect to have a strong release schedule in the second half of 2023 while managing our costs throughout. The foundations of this company are strong, and our addressable market is continuously growing. We are excited to drive new monetization opportunities through our investments in new artists and songwriters, our catalog, and our global expansion.”
“Our results reflect our resilience and operational discipline in the face of macroeconomic headwinds, as well as the impact of the extra week in the prior-year quarter,” added Eric Levin, CFO, Warner Music Group. “Our continued focus on efficiency enabled us to deliver strong operating and free cash flow growth, even while certain revenue lines came under pressure. We are enthusiastic about our release schedule for the second half of the fiscal year, which will feature amazing music from some of our biggest artists.”
