Warner Music Group Corp. reported fiscal fourth‑quarter 2025 revenue of $1.87 billion, a 14.6% year‑over‑year increase that surpassed the consensus estimate of roughly $1.70 billion. Adjusted operating income before depreciation and amortization rose 15% to $405 million, while net income more than doubled to $109 million from $48 million a year earlier. The company’s earnings per share of $0.21 fell short of the $0.34 consensus estimate, a miss of about 39%, largely due to one‑time restructuring and impairment charges that lifted the quarter’s cost base.
Revenue growth was driven by a 12% rise in Recorded Music and a 15% increase in Music Publishing, reflecting continued market‑share gains and strong demand from the company’s top artists. Streaming revenue grew 9% as subscription‑based services expanded, while licensing and physical sales contributed modestly. The company also highlighted incremental revenue opportunities in artificial‑intelligence‑driven music services, a new tailwind that management expects to accelerate in 2026.
The EPS miss was primarily caused by restructuring costs of $30 million and impairment charges of $12 million, which were not part of the prior year’s comparable period. When adjusted for these one‑time items, the underlying earnings per share would have been $0.33, still below the $0.34 consensus but closer to the $0.37 estimate reported by some analysts. Compared with Q3 2025, where EPS was $0.07, the miss underscores the impact of the company’s cost‑reduction program, which is expected to deliver $200 million in annual savings by 2026.
Operating margin slipped to 7.7% from 8.8% year‑over‑year, reflecting the temporary drag from restructuring. Adjusted OIBDA margin held steady at 21.7%, indicating that revenue mix and scale were offsetting the one‑time costs. Management said the company is on track to improve margins by 150–200 basis points in 2026 as the restructuring program matures and AI‑related revenue grows.
The company did not provide quantitative guidance for the next quarter or the full year, but CEO Robert Kyncl emphasized that “market‑share gains are driving record quarterly revenue, and we are focused on sustaining profitable growth in 2026.” CFO Armin Zerza added that the firm remains committed to investing in core repertoire markets while pursuing cost discipline. Analysts noted that the mixed results—strong top‑line growth but EPS miss—will keep investors attentive to how effectively Warner Music can translate revenue momentum into sustainable profitability, especially given its $4.4 billion debt load.
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