Universal Music 1Q Revenue Grew But Streaming Harmed by Advertising

By Mauro Orru

Universal Music Group NV--the record label behind the Weeknd, Billie Eilish and Taylor Swift--posted higher revenue for the first quarter thanks to growing subscriptions and physical sales, though streaming revenue was harmed as the advertising industry continued to reel due to a challenging economic environment.

The world's largest music company said Wednesday that overall revenue climbed to 2.45 billion euros ($2.69 billion) from EUR2.20 billion for the three months to the end of March. Revenue from subscriptions grew 10.3% at constant currency to EUR1.01 billion, while streaming revenue contracted 2.2% to EUR315 million.

The development in streaming revenue marks a downturn compared with the fourth quarter, when streaming revenue grew 1.8% at constant currency. Streaming services boomed at the height of the pandemic as listeners turned to digital when coronavirus restrictions brought live concerts to a standstill, though the pace of growth had declined in recent months.

Physical revenue, which includes CD and vinyl sales, jumped to EUR313 million from EUR237 million. King & Prince, Morgan Wallen, Taylor Swift and TOMORROW X TOGETHER were among the top sellers for the quarter.

Adjusted earnings before interest, taxes, depreciation, and amortization--a key profitability metric for Universal--increased to EUR522 million from EUR455 million, generating an adjusted margin of 21.3%.

UBS analysts had forecast quarterly revenue of EUR2.39 billion and adjusted earnings of EUR516 million on a 21.6% margin.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

April 26, 2023 12:14 ET (16:14 GMT)

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