Concerts, Vinyl Sales Drive UMG's 1Q Revenue

Universal Music Group (UMG), the world’s largest music label, reported first-quarter 2025 revenue of €2.901 billion ($3.31 billion), surpassing analyst expectations of €2.83 billion, with an 11.8% year-over-year increase (9.5% in constant currency). This growth was driven by strong performances in concerts, vinyl record sales, and digital subscriptions, reflecting robust consumer demand across multiple revenue streams.

Key Drivers of Revenue Growth

• Concerts and Live Events: UMG’s license and other revenue surged 33.3% year-over-year (29.8% in constant currency) to €296 million ($311 million), fueled by high-demand concerts from artists like Kendrick Lamar, Sabrina Carpenter, and Lady Gaga. The resurgence of live music events significantly boosted this segment, with strong ticket sales and synchronization income contributing to the growth.
• Vinyl Record Sales: Physical revenue rose 17.6% (15.4% in constant currency) to €300 million ($316 million), driven primarily by vinyl sales growth in the U.S. and Europe. Despite a strong release slate, UMG anticipates flat physical sales for 2025 due to challenging comparisons with prior years. The vinyl resurgence highlights a continued consumer preference for tangible music formats, particularly among collectors and enthusiasts.
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  Digital Subscriptions and Streaming: Subscription revenue, a core component of UMG’s business, grew 11.5% (9.3% in constant currency) to €1.25 billion ($1.31 billion), driven by an increase in global subscribers. Streaming revenue, however, saw modest growth of 2.9% (0.3% in constant currency) to €343 million, as consumption shifted toward less-monetized short-form platforms. UMG noted that subscriber growth, rather than price increases from platforms like Spotify or Apple Music, was the primary driver. Streaming and subscriptions together accounted for over half of total sales, underscoring their critical role in UMG’s revenue model.

Financial Highlights

• Adjusted EBITDA: Increased 11.8% (10.0% in constant currency) to €661 million, with a stable adjusted EBITDA margin of 22.8%. The EBITDA margin improvement was partly due to lower non-cash share-based compensation expenses (€58 million in Q1 2025 vs. €101 million in Q1 2024).
• Recorded Music Revenue: Totaled €2.241 billion, up 12.7% (10.3% in constant currency), reflecting strong performance across subscription, physical, and licensing segments. Top sellers included Kendrick Lamar, Sabrina Carpenter, Lady Gaga, The Weeknd, and Mrs. GREEN APPLE.

Despite the strong quarter, UMG faces challenges:

• Streaming Growth Slowdown: The shift to short-form platforms, which are less monetized than traditional video platforms, restrained streaming revenue growth.
• Physical Sales Outlook: UMG expects flat physical sales in 2025 due to tough comparisons with prior years, despite vinyl’s current strength.
• Merchandising Decline: Lower touring merchandise sales impacted this segment, though direct-to-consumer growth offers some offset.