Warner Music Group Corp. (WMG), established in 1958 and based in New York City, is a prominent global entertainment enterprise primarily focused on music. Its operations span the United States, the United Kingdom, Germany, and numerous other international markets. The company's activities are organized into two distinct divisions: Recorded Music ...Warner Music Group Corp. (WMG), established in 1958 and based in New York City, is a prominent global entertainment enterprise primarily focused on music. Its operations span the United States, the United Kingdom, Germany, and numerous other international markets. The company's activities are organized into two distinct divisions: Recorded Music and Music Publishing.
The Recorded Music division is dedicated to identifying and cultivating emerging musical talent. It handles marketing, promotional campaigns, distribution logistics, sales, and licensing of recordings produced by artists. This segment also actively markets its vast catalog of existing music, issuing compilations, re-releases of classic tracks and videos, and previously unreleased material. Operations are chiefly conducted through renowned record labels including Warner Records, Atlantic Records, Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin' Records, Warner Classics, and Warner Music Nashville. Music and video products are distributed through direct retailers, wholesale distributors, independent labels, distribution centers, joint ventures, physical retail locations, online stores, streaming platforms, and digital download services.
The Music Publishing division owns and acquires intellectual property rights to approximately one million musical compositions, including iconic pop hits, American classics, folk melodies, and scores for motion pictures and theatrical productions. The catalog represents the work of roughly 100,000 songwriters and composers, covering styles such as pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative, and gospel. This segment also provides administrative services for musical scores and soundtracks for external television and film production companies.
Financially, WMG has a market capitalization of about $13.8 billion and trades on NASDAQ. With a workforce of approximately 5,500 employees, the company generates significant revenue and maintains a strong presence in the music industry. Under CEO Robert Kyncl, WMG continues to innovate in the creator economy and artist services, positioning itself as a leader in global entertainment culture.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$6.7B
+4.4%
+7.6%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$365.0M
-16.1%
+11.5%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+45.8%
-4.1%
-1.1%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+10.3%
-19.2%
+5.0%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+5.4%
-19.6%
+3.6%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$539.0M
-15.5%
+6.5%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+8.0%
-19.1%
-1.0%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
712.2%
-13.9%
-14.0%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.66x
-2.8%
+0.7%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Welcome to Warner Music Group third quarter earnings call for the period ended June 30, 2026. At the request of Warner Music Group, today's call is being recorded for replay purposes, and if you object, you may disconnect at any time. Now, I would like to turn today's call over to your host, Mr. Kareem Chin, Head of Investor Relations. You may begin.
Kareem Chin: Good afternoon, welcome to Warner Music Group's fiscal third quarter earnings call. Please note that our earnings press release, earnings snapshot, and Form 10-Q are available on our website. On today's call, we have our CEO, Robert Kyncl, and our acting CFO, Lou Dickler, who will take you through our results and then answer your questions. Before our prepared remarks, I would like to remind you that this communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance. We plan to present certain non-GAAP results, including metrics that are adjusted for notable items during this conference call and in our earnings materials, and have provided schedules reconciling these results to our GAAP results in our earnings press release. All of these materials are posted on our website. Also, please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted. All forward-looking statements are made as of today. We disclaim any duty to update such statements. Our expectations, beliefs, and projections are expressed in good faith. We believe that there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. Investors should not rely on forward-looking statements as they are subject to a variety of risks, uncertainties, and other factors that can cause actual results that differ materially from our expectations. Information concerning these risk factors is contained in our filings with the SEC. With that, I'll turn over to Robert.
Robert Kyncl: Hello, everyone, thank you for joining us today. We have remained focused on execution against our strategic goals. We're proud to have delivered or over-delivered against our targets for the fifth quarter in a row. As you will have already seen in the preliminary financial results we released on Monday, this was yet another quarter of healthy top and bottom-line growth, led by a robust 12% increase in recorded music subscription streaming revenue on an adjusted basis. We also saw continued progress on our cost-savings initiatives. Our operating leverage resulted in margin improvement and strong cash flow generation in the quarter. Highlights include a 9% increase in total revenue, rising to 11% on an adjusted basis, 15% growth in Adjusted OIBDA, which led to 100 basis points of margin expansion, and a 209% increase in operating cash flow that resulted in a roughly $100 million increase in our cash balance. …
