NASDAQ: WMG Warner Music Group Corp. 8-K

Warner Music reports Q3 revenue up 10%, operating income up 80%, margin expansion to 23.2%

Filed August 5, 2026 · Period ending August 5, 2026 · ~1 min read

Key Changes

high

Q3 revenue grew 10% to $1.86B; operating income jumped 80% to $305M; net income swung to $200M from $16M loss; EPS $0.39 vs $(0.03) prior year

Exhibit 99.1 view on EDGAR →
high

Recorded Music streaming revenue up 13.1% (adjusted for BMG termination), driven by subscriber growth, market share gains, and improved deal economics including per-subscriber minimums

Exhibit 99.1 view on EDGAR →
high

Adjusted OIBDA margin expanded 1.4 percentage points to 23.2% (adjusted basis), driven by operating leverage, revenue mix, and restructuring savings; management reiterates high end of 150-200 bps full-year guidance

Exhibit 99.1 view on EDGAR →
high

Free cash flow surged to $114M from $7M prior year; operating cash flow tripled to $142M; cash balance $618M, net debt $4.09B; management reiterates 50-60% operating cash flow conversion target

Exhibit 99.1 view on EDGAR →
medium

Board declared $0.20 per share quarterly dividend on Class A and Class B common stock, payable September 1, 2026 to holders of record August 20, 2026

Exhibit 99.1 view on EDGAR →

Summary

Warner Music delivered a strong third quarter with revenue growth accelerating to 10% and operating income nearly doubling.

The results demonstrate the company's ability to convert streaming growth into margin expansion: Recorded Music streaming revenue grew 13% (adjusted), driven by subscriber growth, market share gains, and improved economics with digital service providers including contractual per-subscriber minimums.

Management's restructuring initiatives are paying off, with adjusted OIBDA margin expanding 1.4 percentage points to 23.2%, putting the company on track for the high end of its 150-200 basis point full-year expansion target. The cash generation story is equally compelling. Free cash flow jumped from $7 million to $114 million, with operating cash flow more than tripling to $142 million. The company ended the quarter with $618 million in cash and reiterated its 50-60% operating cash flow conversion target. The $0.20 quarterly dividend declaration reflects confidence in the business trajectory. For holders, the quarter validates Warner Music's thesis that streaming maturation drives both revenue growth and margin expansion as the company captures operating leverage from its catalog and improved platform economics.

Section-by-Section Diff

Event · Exhibit 99.1

~8,900 words View exhibit on EDGAR ↗

4 Added

Added Q3 FY2026 financial results high

Added in current filing · view on EDGAR →

Total revenue increased 10%, or 9% in constant currency

•Net income was $200 million compared to a loss of $16 million in the prior-year quarter

•Operating income increased 80% to $305 million versus $169 million in the prior-year quarter

•Adjusted OIBDA increased 16% to $433 million versus $373 million in the prior-year quarter, or 15% in constant currency

•Earnings per share was $0.39 compared to $(0.03) in the prior-year quarter

Warner Music Group reported strong third-quarter fiscal 2026 results for the period ended June 30, 2026. Total revenue grew 10% to $305M, driven by robust performance across both Recorded Music and Music Publishing segments. Net income swung to $200 million from a $16 million loss in the prior-year quarter, while operating income increased 80% to $305 million. Adjusted OIBDA rose 16% to $433 million with margin expansion of 1.1 percentage points to 23.2%.

Added Recorded Music streaming growth high

Added in current filing · view on EDGAR → · paraphrased

Streaming revenue increased 11.8% (or 10.1% in constant currency); however, adjusted for the $10 million impact of the BMG Termination compared to the prior-year quarter, Recorded Music streaming revenue was up 13.1% (or 11.3% in constant currency). ... Subscription revenue, adjusted for the $6 million impact of the BMG Termination compared to the prior-year quarter, was up 13.5% (or 11.8% in constant currency). Ad-supported revenue, adjusted for the $4 million impact of the BMG Termination compared to the prior-year quarter, was up 12.0% (or 10.0% in constant currency). The increase in subscription revenue reflects positive market share trends, subscriber growth and improved deal economics.

Recorded Music streaming revenue grew 11.8%, or 13.1% when adjusted for the BMG distribution agreement termination. Subscription streaming revenue increased 12.5% (13.5% adjusted), driven by positive market share trends, subscriber growth, and improved deal economics with digital service providers. Ad-supported streaming revenue rose 10.0% (12.0% adjusted), reflecting strong performance and improved deal terms. The company highlighted contractual per-subscriber minimum increases as a key driver.

Added Margin expansion and cost savings high

Added in current filing · view on EDGAR →

Adjusted OIBDA margin increased 1.1 percentage points to 23.2% from 22.1% in the prior-year quarter (or 1.0 percentage point from 22.2% in constant currency). ... Excluding these items, Adjusted OIBDA increased 19.3% (or 17.7% in constant currency) and Adjusted OIBDA margin increased 1.4 percentage points to 23.2% from 21.8% (or 1.3 percentage points from 21.9% in constant currency). The increases in Adjusted OIBDA and Adjusted OIBDA margin were primarily driven by strong operating performance, revenue mix and savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business

Warner Music achieved significant margin expansion in the quarter, with Adjusted OIBDA margin increasing 1.1 percentage points to 23.2%. When adjusted for one-time items, the margin expanded 1.4 percentage points. The company attributed this improvement to strong operating performance, favorable revenue mix, and cost savings from restructuring initiatives. Management reiterated expectations to achieve the high end of their 150-200 basis points full-year margin expansion guidance.

Added Cash flow and balance sheet high

Added in current filing · view on EDGAR → · paraphrased

Cash provided by operating activities increased to $142 million versus $46 million in the prior-year quarter ... Free Cash Flow increased to $114 million from $7 million in the prior-year quarter, primarily due to the factors affecting cash provided by operating activities described above and due to a decrease in capital expenditures of $11 million, or 28%, to $28 million from $39 million in the prior-year quarter ... As of June 30, 2026, the Company reported a cash balance of $618 million, total debt of $4.710 billion and net debt (defined as total debt, net of deferred financing costs, premiums and discounts, minus cash and equivalents) of $4.092 billion.

Operating cash flow more than tripled to $142 million from $46 million in the prior-year quarter, driven by strong operating performance. Free cash flow increased significantly to $114 million from $7 million, benefiting from both improved operating cash flow and lower capital expenditures. The company ended the quarter with a cash balance of $618 million, up $100 million from the prior-year quarter, and net debt of $4.092 billion. Management reiterated their 50-60% operating cash flow conversion target for fiscal 2026.