Warner Music Group (NASDAQ:WMG) Announces Earnings Results, Beats Expectations By $0.14 EPS

Warner Music Group (NASDAQ:WMG) posted its quarterly earnings data on Thursday. The company reported $0.44 earnings per share for the quarter, topping analysts’ consensus estimates of $0.30 by $0.14, FiscalAI reports. Warner Music Group had a return on equity of 62.81% and a net margin of 6.34%.The company had revenue of $1.73 billion during the quarter, compared to analysts’ expectations of $1.61 billion. During the same period last year, the firm earned $0.07 EPS. The firm’s revenue for the quarter was up 16.7% on a year-over-year basis.

Here are the key takeaways from Warner Music Group’s conference call:

• The company reported a strong Q2 with total revenue up 12%, adjusted OIBDA up 24%, margin expansion of over 200 basis points, operating cash flow growth of 83% for the quarter, and adjusted EPS of $0.44 (up 38%).
• Subscription streaming accelerated to 15% growth (adjusted), which management says was driven roughly by ~6–7% subscriber growth, ~3 percentage points from pricing/PSM increases, ~3 points from market-share gains, and easier comps.
• Warner is positioning itself as an AI leader via licensing deals (notably with Suno) and AI-powered premium tiers; management says AI has had minimal dilution so far and expects AI-related revenue to materially contribute beginning fiscal 2027, though timing and scale remain uncertain.
• Management continues inorganic expansion in catalogs and distribution—deploying about $650 million of the Bain JV capacity into high‑margin catalogs, and announcing acquisitions/partnerships like Revelator and TuStreams to grow distribution and independent-artist pipeline, targeting ~20% returns on investments.
• Balance-sheet and leverage remain notable with $741 million cash, $4.7 billion total debt and $4.0 billion net debt, although the company plans continued dividends and opportunistic buybacks.

Warner Music Group Stock Up 7.5%

Shares of NASDAQ WMG opened at $33.36 on Friday. The company has a quick ratio of 0.69, a current ratio of 0.70 and a debt-to-equity ratio of 5.30. Warner Music Group has a 52 week low of $23.34 and a 52 week high of $34.63. The firm has a 50-day moving average price of $27.38 and a 200 day moving average price of $29.00. The stock has a market capitalization of $17.43 billion, a price-to-earnings ratio of 39.25, a price-to-earnings-growth ratio of 0.51 and a beta of 1.25.

Warner Music Group Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, June 2nd. Investors of record on Tuesday, May 26th will be paid a $0.19 dividend. The ex-dividend date is Tuesday, May 26th. This represents a $0.76 annualized dividend and a dividend yield of 2.3%. Warner Music Group’s dividend payout ratio (DPR) is 89.41%.

Hedge Funds Weigh In On Warner Music Group

Several hedge funds and other institutional investors have recently bought and sold shares of WMG. Royal Bank of Canada raised its holdings in Warner Music Group by 10.2% during the first quarter. Royal Bank of Canada now owns 77,162 shares of the company’s stock worth $2,420,000 after purchasing an additional 7,119 shares during the last quarter. Amundi raised its position in Warner Music Group by 120.7% during the first quarter. Amundi now owns 7,496 shares of the company’s stock worth $232,000 after acquiring an additional 4,100 shares during the last quarter. Goldman Sachs Group Inc. raised its holdings in shares of Warner Music Group by 5.6% in the first quarter. Goldman Sachs Group Inc. now owns 948,741 shares of the company’s stock worth $29,743,000 after acquiring an additional 50,035 shares during the last quarter. Invesco Ltd. raised its holdings in shares of Warner Music Group by 23.2% in the second quarter. Invesco Ltd. now owns 193,434 shares of the company’s stock worth $5,269,000 after acquiring an additional 36,380 shares during the last quarter. Finally, AQR Capital Management LLC raised its holdings in shares of Warner Music Group by 293.4% in the second quarter. AQR Capital Management LLC now owns 638,144 shares of the company’s stock worth $17,287,000 after acquiring an additional 475,929 shares during the last quarter. 96.88% of the stock is owned by institutional investors and hedge funds.

Trending Headlines about Warner Music Group

Here are the key news stories impacting Warner Music Group this week:

• Positive Sentiment: JPMorgan raised its price target on Warner Music Group to $43 from $40 and kept an overweight rating, signaling confidence that the stock still has meaningful upside from current levels. Benzinga
• Positive Sentiment: Warner Music reported strong fiscal Q2 results, with EPS of $0.44 beating estimates of $0.30 and revenue of $1.73 billion topping expectations of $1.61 billion, helped by a 16.7% year-over-year sales increase. Article
• Positive Sentiment: Revenue jumped 17% to about $1.7 billion, reflecting solid performance from major releases including Bruno Mars and sombr, which suggests healthy streaming and catalog demand. Article
• Positive Sentiment: Warner Music and Paramount Pictures announced a multi-year first-look partnership to develop theatrical films based on WMG artists and songwriters, opening a potential new monetization channel for the company’s music catalog. Article
• Neutral Sentiment: Warner Music declared a quarterly dividend of $0.19 per share, which is a modest shareholder return but not likely the main driver of the stock move today.

Wall Street Analyst Weigh In

Several analysts have recently commented on the stock. Scotiabank upgraded shares of Warner Music Group from a “sector perform” rating to a “sector outperform” rating in a research note on Friday, February 13th. Citigroup reduced their target price on shares of Warner Music Group from $41.00 to $40.00 and set a “buy” rating for the company in a research note on Wednesday, January 21st. Evercore reissued an “outperform” rating and issued a $43.00 price target on shares of Warner Music Group in a report on Friday. Weiss Ratings reissued a “hold (c)” rating on shares of Warner Music Group in a report on Friday, March 27th. Finally, Guggenheim raised their price target on Warner Music Group from $34.00 to $36.00 and gave the company a “buy” rating in a report on Friday. Fourteen equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average price target of $37.38.

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.