Warner Music beats Q1 revenue estimates on strength in digital and streaming services

Overview

• Music company reported fiscal Q1 revenue up 10%, beating analyst expectations

• Operating income for fiscal Q1 rose 35% yr/yr

• Adjusted OIBDA for fiscal Q1 increased 28% yr/yr

Outlook

• Warner Music Group plans 150-200 basis points margin improvement in 2026

• Company aims to accelerate growth through core investments and monetization expansion

• Warner Music Group leveraging AI for long-term value creation

Result Drivers

• RECORDED MUSIC GROWTH - Driven by digital and streaming revenue increases, offset by a decline in physical sales

• MUSIC PUBLISHING GROWTH - Gains across digital, synchronization, and performance revenues

• COST SAVINGS - Margin expansion supported by cost-saving measures and strategic investments

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the entertainment production peer group is "buy"

• Wall Street's median 12-month price target for Warner Music Group Corp is $37.45, about 32.8% above its February 4 closing price of $28.20

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 24 three months ago

Press Release: ID:nBw6WcCBa

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