Warner Music Group (NASDAQ:WMG – Get Free Report) issued its quarterly earnings results on Wednesday. The company reported $0.51 EPS for the quarter, beating analysts’ consensus estimates of $0.34 by $0.17, FiscalAI reports. Warner Music Group had a net margin of 9.20% and a return on equity of 97.19%. The business had revenue of $1.86 billion for the quarter, compared to analysts’ expectations of $1.81 billion. During the same quarter in the prior year, the firm posted ($0.03) earnings per share. The business’s quarterly revenue was up 10.4% compared to the same quarter last year.
Here are the key takeaways from Warner Music Group’s conference call:
- Positive Sentiment: Warner Music reported strong Q3 momentum, with adjusted revenue up 11%, Adjusted OIBDA up 18%, and Adjusted EPS up 21%; operating cash flow increased 209% and cash rose by roughly $100 million.
- Positive Sentiment: Recorded-music subscription streaming revenue grew 12%, driven by 6%–7% subscriber growth, approximately 3.5 percentage points from pricing, and about 1 percentage point from market-share gains. Contractual wholesale price increases now cover 88% of subscription-streaming revenue, and management expects a slight acceleration in Q4, including the Apple deal.
- Positive Sentiment: Management reaffirmed its targets for high-single-digit revenue growth, double-digit Adjusted OIBDA and EPS growth, and 50%–60% operating-cash-flow conversion. The company remains on track for the high end of its 150–200 basis-point fiscal 2026 margin-expansion target, supported by cost savings, catalog growth, and operating leverage.
- Neutral Sentiment: Warner said AI licensing partnerships, including Suno, are expected to contribute materially to subscription-streaming revenue beginning in fiscal 2027, while the company continues working through complex artist permissioning and safeguards against unauthorized AI content. Armin Zerza’s departure as CFO led to an interim appointment for Lou Dickler, with a permanent CFO search underway.
Warner Music Group Price Performance
Warner Music Group stock opened at $26.44 on Friday. Warner Music Group has a 52 week low of $23.34 and a 52 week high of $35.42. The company’s 50 day moving average price is $28.13 and its two-hundred day moving average price is $28.72. The stock has a market cap of $13.79 billion, a P/E ratio of 20.98, a P/E/G ratio of 0.41 and a beta of 1.30. The company has a quick ratio of 0.71, a current ratio of 0.73 and a debt-to-equity ratio of 5.62.
Warner Music Group Increases Dividend
Key Headlines Impacting Warner Music Group
Here are the key news stories impacting Warner Music Group this week:
- Positive Sentiment: Earnings and revenue exceeded expectations. Warner Music reported quarterly EPS of $0.51, well above the $0.34 consensus estimate, while revenue rose 10.4% year over year to $1.86 billion, topping forecasts of $1.81 billion. EPS also improved from a loss of $0.03 in the prior-year period. Warner Music Group quarterly earnings report
- Positive Sentiment: Warner Music raised its quarterly dividend. The company declared a $0.20-per-share dividend payable September 1 to shareholders of record August 20. The payout is 5.3% higher than the previous $0.19 dividend and represents an annualized yield of approximately 3.1%, improving the stock’s income appeal. Warner Music Group key earnings metrics
- Positive Sentiment: Management continues to target operating cash-flow conversion of 50% to 60%. This goal could reassure investors that revenue growth will translate into cash generation, supporting dividends and other capital-allocation initiatives. Warner Music cash flow conversion and Apple deal
- Neutral Sentiment: Additional earnings materials and analyst analysis are focused on operating metrics for the quarter ended June 2026. These details may help investors determine whether the beat reflects durable streaming, recorded-music and publishing trends. Warner Music Group Q3 earnings call transcript
- Negative Sentiment: The Apple-related deal includes platform-service-related cost increases extending into the fourth quarter, which could pressure margins or limit near-term cash-flow benefits despite stronger sales. WMG also carries substantial financial leverage, increasing sensitivity to execution and interest costs.
Wall Street Analysts Forecast Growth
A number of research analysts have recently issued reports on WMG shares. Weiss Ratings reissued a “hold (c)” rating on shares of Warner Music Group in a research note on Wednesday, June 24th. UBS Group lifted their target price on Warner Music Group from $40.00 to $42.00 and gave the stock a “buy” rating in a report on Friday, May 8th. Morgan Stanley reiterated an “overweight” rating and set a $36.00 target price on shares of Warner Music Group in a research report on Thursday. Wall Street Zen cut shares of Warner Music Group from a “buy” rating to a “hold” rating in a report on Saturday, July 18th. Finally, Zacks Research downgraded shares of Warner Music Group from a “strong-buy” rating to a “hold” rating in a research note on Monday, June 22nd. Thirteen equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $38.21.
View Our Latest Stock Report on Warner Music Group
Institutional Trading of Warner Music Group
Institutional investors and hedge funds have recently modified their holdings of the business. Quarry LP purchased a new stake in Warner Music Group during the fourth quarter valued at about $40,000. Osaic Holdings Inc. increased its stake in shares of Warner Music Group by 480.9% in the second quarter. Osaic Holdings Inc. now owns 1,493 shares of the company’s stock worth $41,000 after purchasing an additional 1,236 shares in the last quarter. Caitong International Asset Management Co. Ltd raised its position in shares of Warner Music Group by 774.6% in the third quarter. Caitong International Asset Management Co. Ltd now owns 1,207 shares of the company’s stock valued at $41,000 after purchasing an additional 1,069 shares during the period. Parallel Advisors LLC raised its position in shares of Warner Music Group by 355.7% in the fourth quarter. Parallel Advisors LLC now owns 1,531 shares of the company’s stock valued at $47,000 after purchasing an additional 1,195 shares during the period. Finally, Quadrant Capital Group LLC lifted its stake in shares of Warner Music Group by 740.0% during the 4th quarter. Quadrant Capital Group LLC now owns 1,890 shares of the company’s stock valued at $58,000 after buying an additional 1,665 shares in the last quarter. 96.88% of the stock is owned by hedge funds and other institutional investors.
About Warner Music Group
Warner Music Group is a major global music company that operates across recorded music and music publishing. Its recorded-music business comprises a portfolio of well-known labels—including Atlantic, Warner Records and Parlophone—as well as distribution and artist-services operations that support both established and emerging artists. The company’s publishing arm, Warner Chappell Music, manages songwriting catalogs and administers rights for compositions across multiple media, providing licensing for film, television, advertising and other commercial uses.
WMG’s activities span the full music value chain: signing and developing artists, producing and marketing recordings, distributing music through physical channels and streaming platforms, and monetizing rights through licensing, synchronization and neighboring-rights collection.
Featured Articles
- Five stocks we like better than Warner Music Group
- One Comment on CVS’s Earnings Call Sent the Stock Tumbling
- Sandisk Just Delivered a Blowout Quarter—Here’s Why the Stock Is Falling
- 4 Oil and Gas ETF Plays as Prices Stay Sky-High
- What Tesla Stands to Lose If It Walks Away From China
Receive News & Ratings for Warner Music Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Warner Music Group and related companies with MarketBeat.com's FREE daily email newsletter.
