Warner Music Group stock falls as Q2 results miss estimates

Investing.com -- Warner Music Group Corp. (NASDAQ:WMG) reported second-quarter earnings and revenue that fell short of analyst expectations, sending shares down 7.6% in Wednesday trading.

The music entertainment company posted adjusted earnings per share of $0.07 for the quarter ended March 31, 2025, missing the analyst consensus estimate of $0.29. Revenue came in at $1.48 billion, below the $1.52 billion analysts were expecting.

Total (EPA:TTEF) revenue decreased 1% YoY, or increased 1% in constant currency. Recorded Music revenue declined 1% to $1.18 billion, while Music Publishing revenue grew 1% to $310 million.

Digital revenue, which makes up the bulk of Warner’s business, decreased 0.8% YoY. Streaming revenue specifically was down 0.3%, with Recorded Music streaming revenue falling 0.4%.

"Our strategy is starting to bear fruit, with our strongest chart presence in two years, translating to expanding new release market share in the US," said CEO Robert Kyncl. "As we replicate our strategy across other labels and geographies, and drive a virtuous cycle of greater reinvestment, we expect to deliver lasting value for artists and songwriters, and sustained growth and profitability for shareholders."

The company noted that its cost savings plans are on track, with reinvestment initiatives accelerating. Operating income increased 41% to $168 million, helped by lower restructuring charges.

For the first half of fiscal 2025, Warner Music Group reported a 53% increase in operating cash flow to $401 million and a 59% jump in free cash flow to $329 million.

The stock’s sharp decline suggests investors were disappointed by the earnings and revenue misses, despite management’s optimistic outlook on the company’s strategy.

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