Warner Music Group Corp (NASDAQ:WMG) reported strong revenue growth for its fiscal fourth quarter ended September 30 but the company missed Wall Street expectations for earnings per share, sending its shares about 1.4% lower on Thursday.
The music recording company reported revenue of $1.87 billion, up 14.6% year-over-year and comfortably above analysts’ consensus of roughly $1.70 billion.
The revenue gains were attributed to momentum from artists and songwriters, market share gains, and continued growth in streaming and digital revenue streams. Recorded Music streaming revenue grew 7.5%, while Music Publishing revenue rose 14.2%, supported by higher performance, digital, mechanical, and synchronization revenue.
Adjusted operating income before depreciation and amortization (OIBDA) for the quarter rose 15% to $405 million, compared with $353 million in the year-ago period, reflecting operational leverage and efficiency initiatives. Net income more than doubled to $109 million from $48 million a year earlier.
Despite the top-line strength, Warner Music’s earnings per share came in at $0.21, missing the consensus estimate of $0.34. The shortfall was attributed to higher restructuring costs, non-cash impairment charges, and other operating expenses.
Operating margins declined slightly to 7.7% from 8.8% in the prior year.
"With our artists and songwriters hotter than ever, market share gains drove our quarterly revenues to an all-time high,” Warmer Music CEO Robert Kyncl said in a statement.
“Our powerful momentum is underpinned by increasing the value of music through volume and rate increases- and now with incremental revenue opportunities in AI."
Looking ahead, Warner Music said its 2026 outlook is supported by healthy industry trends and strategic initiatives designed to accelerate growth. The company expects cost savings to contribute 150 to 200 basis points of margin improvement in the coming year.
“We look forward to sustained profitable growth in 2026, as we continue to invest to deliver bigger opportunities for artists and songwriters and greater shareholder value,” Warner Music’s chief financial officer Armin Zerza said.