Warner Music Group (NASDAQ:WMG) Announces Quarterly Earnings Results, Beats Expectations By $0.17 EPS

Warner Music Group (NASDAQ:WMG) released its earnings results on Wednesday. The company reported $0.51 EPS for the quarter, beating the consensus estimate of $0.34 by $0.17, FiscalAI reports. The firm had revenue of $1.86 billion for the quarter, compared to analysts’ expectations of $1.81 billion. Warner Music Group had a net margin of 6.34% and a return on equity of 62.01%.

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 Stock Up 0.8%

Shares of NASDAQ WMG traded up $0.20 during mid-day trading on Wednesday, reaching $26.00. The company had a trading volume of 2,718,909 shares, compared to its average volume of 2,379,049. The company has a debt-to-equity ratio of 5.62, a quick ratio of 0.71 and a current ratio of 0.73. Warner Music Group has a twelve month low of $23.34 and a twelve month high of $35.42. The stock’s 50 day moving average is $28.39 and its 200-day moving average is $28.78. The stock has a market capitalization of $13.56 billion, a PE ratio of 30.59, a price-to-earnings-growth ratio of 0.36 and a beta of 1.30.

Warner Music Group Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Tuesday, June 2nd. Shareholders of record on Tuesday, May 26th were paid a dividend of $0.19 per share. The ex-dividend date of this dividend was Tuesday, May 26th. This represents a $0.76 dividend on an annualized basis and a dividend yield of 2.9%. Warner Music Group’s dividend payout ratio (DPR) is 89.41%.

Analysts Set New Price Targets

WMG has been the subject of a number of research reports. UBS Group increased their price target on Warner Music Group from $40.00 to $42.00 and gave the company a “buy” rating in a research note on Friday, May 8th. Guggenheim boosted their price target on shares of Warner Music Group from $34.00 to $36.00 and gave the stock a “buy” rating in a research report on Friday, May 8th. Weiss Ratings reiterated a “hold (c)” rating on shares of Warner Music Group in a report on Wednesday, June 24th. JPMorgan Chase & Co. lifted their price target on shares of Warner Music Group from $40.00 to $43.00 and gave the stock an “overweight” rating in a research report on Friday, May 8th. Finally, Evercore reiterated an “outperform” rating and set a $43.00 price objective on shares of Warner Music Group in a research report on Friday, May 8th. Fourteen equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to data from MarketBeat, Warner Music Group presently has a consensus rating of “Moderate Buy” and an average price target of $38.43.

Institutional Investors Weigh In On Warner Music Group

Several institutional investors have recently made changes to their positions in the company. Millennium Management LLC increased its holdings in Warner Music Group by 178.5% in the third quarter. Millennium Management LLC now owns 3,183,654 shares of the company’s stock worth $108,435,000 after buying an additional 2,040,425 shares during the last quarter. UBS Group AG lifted its stake in shares of Warner Music Group by 112.8% in the 3rd quarter. UBS Group AG now owns 2,226,151 shares of the company’s stock valued at $75,823,000 after purchasing an additional 1,180,256 shares during the last quarter. Freestone Grove Partners LP bought a new stake in Warner Music Group in the third quarter worth $36,821,000. Man Group plc raised its holdings in Warner Music Group by 906.0% during the third quarter. Man Group plc now owns 928,204 shares of the company’s stock valued at $31,615,000 after buying an additional 835,940 shares in the last quarter. Finally, HRT Financial LP boosted its stake in shares of Warner Music Group by 836.1% during the 4th quarter. HRT Financial LP now owns 718,461 shares of the company’s stock worth $22,035,000 after acquiring an additional 641,713 shares in the last quarter. 96.88% of the stock is currently owned by institutional investors and hedge funds.

Warner Music Group Company Profile

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.