Warner Music Group Corp. (NASDAQ:WMG) Reports Mixed Q3 2025 Results: Revenue Beat Overshadowed by Unexpected Loss

Warner Music Group Corp. (NASDAQ:WMG) reported its fiscal third-quarter results for the period ended June 30, 2025, delivering mixed financial performance relative to analyst expectations. The company posted revenue of $1.689 billion, up 8.7% year-over-year (7.0% in constant currency), surpassing the consensus estimate of $1.606 billion. However, earnings per share (EPS) came in at -$0.03, a sharp decline from the prior-year quarter's $0.14 and well below the estimated $0.27.

Key Financial Highlights vs. Estimates

• Revenue: $1.689B (actual) vs. $1.606B (estimated) – beat by 5.2%
• EPS: -$0.03 (actual) vs. $0.27 (estimated) – miss by significant margin
• Adjusted OIBDA: $373M, up 18% YoY, with margin expansion to 22.1% from 20.3%
• Free Cash Flow: $7M, down sharply from $160M in the prior-year quarter

Market Reaction

The stock showed modest pre-market gains (+3.3%), suggesting investors may be weighing the revenue beat against the unexpected net loss. Over the past month, shares have been relatively flat (+0.17%), while the two-week performance reflects a slight decline (-5.1%). The muted reaction could indicate that while revenue growth was strong, profitability concerns—stemming from restructuring costs, foreign exchange impacts, and higher investments—are tempering enthusiasm.

Segment Performance

• Recorded Music: Revenue rose 8.2% to $1.354B, driven by digital (+5.3%), artist services (+22.6%), and licensing (+23.3%).
• Music Publishing: Revenue increased 10.2% to $336M, with growth across digital, performance, and synchronization revenue.

Outlook & Analyst Expectations

While the press release did not provide explicit forward guidance, analysts estimate Q4 2025 revenue at $1.678B and full-year revenue at $6.47B. The company’s ability to sustain digital growth while managing costs will be critical in meeting these projections.

Recent Developments

Warner Music also announced a quarterly dividend of $0.19 per share, signaling confidence in cash flow stability despite the decline in free cash flow. Additionally, the appointment of Lo Ting-Fai as President of Warner Music APAC highlights ongoing strategic investments in key growth markets.

Conclusion

Warner Music’s Q3 results reflect strong top-line growth but profitability challenges due to restructuring and currency headwinds. The market’s reaction appears cautiously optimistic, balancing revenue outperformance against earnings pressure.

For more detailed earnings estimates and historical performance, visit WMG’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.