Universal Music Group posts $2.9bn revenue in Q3

According to the company’s financial results for the third quarter (Q3) released on 26 October, excluding items affecting comparability, revenue grew 10.6% in constant currency.

For the first nine months of the year, UMG also increased revenue by 9.4% in constant currency to €7.9bn. Excluding items affecting comparability, revenue grew 11.1%.

UMG said the Q3 result was driven by “healthy constant currency growth in recorded music, music publishing and merchandising and other segments.”

UMG’s recorded music subscription revenue was up 13% YoY to €3.1m, while streaming revenue (ad-funded) grew 5%. 

Physical revenue increased 20.0%, driven by strong vinyl sales, particularly in the US and Europe, as well as multi-format physical growth in Japan. Top sellers included King & Prince, Taylor Swift, Morgan Wallen, Karol G and Metro Boomin, while top sellers in the prior year included BTS, the Encanto soundtrack, Olivia Rodrigo, Morgan Wallen and The Weeknd.

Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of €581m increased 5.1% YoY, or 11.3% in constant currency, and adjusted EBITDA margin expanded 0.3 percentage points to 21.1%.

Excluding items affecting comparability, adjusted EBITDA grew 13.8% YoY, or 20.0% in constant currency, and adjusted EBITDA margin expanded 1.8 percentage points to 21.1%.

Music publishing revenue amounted to €491m in the third quarter of 2023, up 17.5% YoY. Music publishing revenue in the third quarter of 2023 included the €53m benefit from the CRB Phonorecords III accrual. Excluding this item, UMG’s music publishing revenue was up 4.8% YoY, or 11.2% in constant currency.

“Our performance this quarter was marked not only by continued growth across our businesses but also by strong progress on our long-term strategy,” UMG’s chairman and CEO Sir Lucian Grainge said. “We remain laser-focused on driving sustainable value creation for the company and its stakeholders – identifying and capitalising on new revenue streams for UMG and our artists, responsibly advancing new technology, and expanding our global footprint.”

UMG’s executive vice-president, chief financial officer and president of operations Boyd Muir said: “For the ninth consecutive quarter as a stand-alone public company, we once again reported strong growth in revenue and adjusted EBITDA. Even as we deliver current results, we continue to execute on the growth prospects that lie ahead for UMG.”

UMG’s Q3 2023 results summary

• Revenue of €2.7m increased 3.3% year-over-year, or 9.9% in constant currency, driven by healthy constant currency growth in all segments. Excluding items affecting comparability detailed below, revenue grew 4.1% YoY, or 10.6% in constant currency.
• Recorded music subscription revenue grew 6.7% YoY, or 13.0% in constant currency and streaming revenue declined 1.4% YoY, but grew 5% in constant currency.