WMG EARNINGS PACED BY DIGITAL, STREAMING

Warner Music Group announced its Q4 and full-year financial results for the period ended 9/30 this morning. For fiscal 2015, total revenue declined 2.0% but was up 6.2% at constant currency to $2.97 billion, while digital revenue grew 3.6% or +10.0% in constant currency.

Recorded-music revenue for the fiscal year revenue was $2.5 billion. At Warner/Chappell, digital accounted for 20.5% of the pubco's revenue of $482m, up slightly from from 18.8% the previous year. Performance royalties, the largest component of publishing revenue, was flat at $184 million. Improvements in synchronization revenue made up for a small decline in mechanical revenue.

Tellingly, streaming revenue grew 34% for the year and 47% in Q4.

Q4 total revenue declined 2.7% to $750m but rose 7.3% in constant currency, with digital revenue up 10.6% to $333m (19.8% in constant currency) and net loss narrowing slightly from $24m to $23m. OIBDA for the quarter was $113m versus $107m in the prior-year quarter.

Recorded music was down 2% from the year-ago quarter to $631m, as growth in digital and artist services and expanded-rights revenue was offset by declines in physical and licensing revenue, blamed mostly on exchange rates.

Warner/Chappell was down 5% to $123m in Q4, as growth in digital and sync revenue was offset by declines in performance and mechanical revenue, also impacted by exchange rates. Digital accounted for 20.5% of the pubco’s revenue of $482m, up from 18.8% a year earlier. Performance royalties were flat at $184m. Improvements in sync revenue made up for a small decline in mechanical revenue.

“We had an excellent year,” said CEO Stephen Cooper. “We’ve topped the charts with breakout talent, legendary songwriters and global superstars. As the first music major to report streaming revenue exceeding download revenue, we’ve continued to lead the digital transformation, helping us to achieve four consecutive years of revenue growth in our combined recorded music digital and physical business. We’ve outperformed the industry and we are well positioned to build on our success this coming year and beyond.”

“Our fourth-quarter and full-year results are impressive,” EVP/CFO Eric Levin chimed in. “We stayed focused on cost and cash management throughout the year and saw significant improvement in key financial metrics. As I reflect on my first full year at the company, I’m pleased by our progress and excited by our potential.”