Universal Music Group Q2 2025 slides: revenue up 4.5%, EBITDA grows 7.3%

Universal Music Group ( AMS (VIE:AMS2):AS:UMG) presented its second quarter and first half 2025 financial results on July 31, 2025, showing continued revenue and profitability growth despite some deceleration compared to the first quarter. The company reported solid performance in its core recorded music and publishing segments while continuing to face challenges in merchandising.

Quarterly Performance Highlights

UMG reported second quarter 2025 revenue of €2,980 million, representing a 4.5% year-over-year increase in constant currency compared to €2,932 million in Q2 2024. Adjusted EBITDA for the quarter reached €676 million, up 7.3% from €649 million in the prior year period, with the adjusted EBITDA margin expanding to 22.7%, a 0.6 percentage point improvement.

This quarterly performance, while positive, shows a moderation from the 9.5% revenue growth reported in Q1 2025, suggesting some deceleration in the company’s growth trajectory.

As shown in the following chart of quarterly financial results:

For the first half of 2025, UMG’s consolidated revenue reached €5,881 million, up 6.9% year-over-year in constant currency. First half adjusted EBITDA grew 8.5% to €1,336 million, with the adjusted EBITDA margin improving slightly to 22.7% from 22.4% in the first half of 2024. Adjusted diluted earnings per share increased 9.1% to €0.48.

The company’s first half financial performance is illustrated in this comprehensive chart:

Segment Performance Analysis

UMG’s recorded music segment, which represents the largest portion of the company’s business, delivered Q2 revenue of €2,224 million, up 3.9% year-over-year. For the first half, recorded music revenue reached €4,464 million, a 7.0% increase, with adjusted EBITDA growing 9.9% to €1,163 million and margin expanding to 26.1%.

The recorded music segment’s financial performance is detailed in the following chart:

Within recorded music, subscription revenue showed particularly strong growth, increasing 8.5% in Q2 and 8.9% in the first half. Streaming revenue grew 9.1% in Q2 and 4.6% in the first half. Physical sales declined 12.4% in Q2 but were nearly flat for the first half at -0.5%.

The breakdown of recorded music revenue by category is illustrated here:

The music publishing segment demonstrated robust growth, with Q2 revenue increasing 14.5% to €570 million and first half revenue up 12.1% to €1,125 million. First half adjusted EBITDA grew 7.9% to €259 million, though the margin contracted slightly to 23.0% from 23.9%.

As shown in the music publishing financial results:

The merchandising segment continued to face challenges, with Q2 revenue declining 12.7% to €192 million and first half revenue down 10.0% to €305 million. The segment’s adjusted EBITDA margin for the first half deteriorated to -1.0%, a 6.3 percentage point decrease from the prior year.

Strategic Initiatives

UMG highlighted several strategic initiatives aimed at driving future growth. The company is expanding its presence in China through Deutsche Grammophon, Universal Music China, and Blue Note China, positioning itself to capitalize on the growing Chinese music market.

The company also showcased its innovation in AI technology, with four patented AI-enabled technologies focused on marketing efficiency, audience engagement prediction, social media content trend analysis, and health-enhancing audio supplements. These patents are part of a broader portfolio of 15 patents filed in areas including musical collaboration, multimedia content creation, and rights management.

The AI technology innovations are detailed in this slide:

UMG is implementing the second phase of its strategic organizational redesign, which is expected to generate significant cost savings. Phase 1 actions completed in 2024 resulted in €75 million in cost savings, with an additional €50 million expected in 2025. Phase 2 is projected to deliver €40 million in cost savings in the second half of 2025, €40-50 million in 2026, and €35-45 million in 2027.

The organizational redesign timeline and expected savings are illustrated here:

Forward-Looking Statements

UMG’s free cash flow before investing activities was positive at €143 million for the first half of 2025. However, after accounting for catalog investments of €149 million and other investing activities of €173 million, the company reported a negative free cash flow of €179 million.

The company’s cash flow breakdown is detailed in this chart:

The company’s net profit for the first half of 2025 increased dramatically by 56.7% to €1,432 million, while adjusted net profit grew 9.0% to €882 million. Basic earnings per share rose 56.0% to €0.78.

As shown in the net profit and EPS results:

UMG’s stock closed at €25.46 on July 31, 2025, down 0.31% on the day of the earnings presentation. The stock is currently trading above its 52-week low of €20.38 but below its 52-week high of €29.19.

While UMG continues to demonstrate solid financial performance in its core business segments, the company faces challenges in its merchandising business and will need to successfully execute its strategic initiatives, particularly the organizational redesign and technological innovations, to maintain growth momentum in an increasingly competitive digital music landscape.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.