WMG'S Q2 DOUBLE-DIGIT DIGITAL DRIVER

Warner Music Group’s digital revenue topped 60% of all revenue for the first time in the company’s history, growing 25% in constant currency over the second quarter 2018.

Digital revenue for the quarter, which ended 3/31, hit $661m, up from $547m a year ago. Streaming accounted for $537m of the company’s $1.09b in total revenue, which grew 17.6% in constant currency over the year prior.

Revenue, which grew in all regions, included a net three percentage point benefit from M&A, primarily related to the acquisition of EMP and a one percentage point benefit from the adoption of FASB’s new revenue recognition standard, ASC 606.

“Revenue and OIBDA were both up double-digits,” said WMG EVP and CFO Eric Levin. “Our cash position remains strong, with $470 million on the balance sheet at quarter-end.”

Operating income was $122m compared to $83m in the prior-year quarter. OIBDA was $191m, up 25.7% from $152m in the prior-year quarter.

Recorded Music revenue grew $142m—22.4% in constant currency—while Music Publishing revenue declined $16m, 6% in constant currency.

In a conference call with investors, WMG CEO Steve Cooper said that while the company in thrilled with the growth in streaming, it would continue to fight for appropriately compensate songwriters and artists. One of the culprits, he said in a not-so veiled reference to Spotify and Apple Music are “mismanaged family plans.”

Cooper touted international moves in Peru, Africa and Turkey, praised the success of Twice, The Greatest Showman soundtrack, Panic! At the Disco, Clean Bandit and Meek Mill, and saluted the late Nipsey Hussle as “a brilliant creative soul.”