Universal Music Group Revenues Up 6%

Universal Music Group (UMG) reported strong financial results for the first quarter of 2024. Here are the key highlights:

Revenue Growth: UMG generated revenue of 2.59 billion euros (approximately $2.8 billion) in Q1 2024. This represents a 5.8% increase (or 7.9% at constant currency) compared to the same period in the previous year1.

Adjusted EBITDA Margin: The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved by 13.2%, reaching 591 million euros ($640 million). The adjusted EBITDA margin increased to 22.8%, up from 21.3% in Q1 20231.

Product Mix and Margin Improvement: UMG attributed the margin improvement to revenue growth and a change in product mix, specifically a decrease in physical sales. However, executives cautioned against reading too much into any single quarter and emphasized looking at longer-term trends1.

TikTok Licensing Deal: UMG recently announced a new licensing deal with TikTok. While specific details were not disclosed, executives stated that the deal provides fair value relative to other short-form video platforms. The agreement includes aspects of economic value beyond direct revenue, such as ad credits, data, and marketing programs1.

Recorded Music and Subscription Services: UMG’s recorded-music division saw growth, with recorded-music subscription revenue increasing by 10.7% to 1.12 billion euros ($1.2 billion). Subscription services continue to be a driving force for UMG, accounting for 43.3% of total company revenue. Subscriber growth remains a significant driver of year-over-year growth rates1.

Total Streaming Revenue: While total streaming revenue grew at a slower rate (8.9%), it reached 343 million euros ($371 million) in Q1 2024. UMG remains encouraged by improvements in ad-supported streaming but remains cautious about growth until consistent broad-based improvements are seen across all partners and geographies1.

Overall, UMG’s diverse revenue streams, including subscriptions and streaming, contribute to its continued success in the music industry