Warner Music Group Corp. (NASDAQ:WMG) Reports Q4 2025 Revenue Beat and EPS Miss

Warner Music Group Corp. (NASDAQ:WMG) has released its financial results for the fiscal fourth quarter and full year ended September 30, 2025, delivering a performance marked by a significant revenue beat but a substantial miss on profitability, which has been reflected in early market trading.

Quarterly Performance Versus Expectations

The company’s fourth-quarter results presented a mixed picture for investors. On the top line, Warner Music Group demonstrated considerable strength, with revenue climbing 14.6% year-over-year to $1.87 billion. This figure comfortably surpassed analyst estimates, which had pegged revenue at approximately $1.70 billion. The strong sales growth was attributed by management to robust artist momentum and market share gains.

However, the bottom line told a different story. The company reported GAAP earnings per share (EPS) of $0.21, which fell significantly short of the $0.34 consensus estimate among analysts. This represents an earnings miss of over 38%. The disparity between the revenue beat and the EPS miss appears to be a primary driver behind the stock's reaction in pre-market trading, where it was up a modest 1.6%, suggesting a tempered response to the headline revenue number in light of the profitability shortfall.

Key quarterly financial highlights include:

• Revenue: $1.87 billion (Actual) vs. ~$1.70 billion (Estimate) - A beat of approximately 10%.
• EPS: $0.21 (Actual) vs. $0.34 (Estimate) - A miss of approximately 38.7%.
• Recorded Music Revenue: Grew 14.6% to $1.53 billion.
• Music Publishing Revenue: Increased 14.2% to $337 million.
• Adjusted OIBDA: Rose 14.7% to $405 million.

Full-Year Fiscal 2025 Summary

For the full fiscal year 2025, Warner Music Group reported total revenue of $6.71 billion, a 4.4% increase compared to the prior year. Net income for the year was $370 million, or $0.69 per share, which represents a decline from the $478 million net income reported in fiscal 2024. The company noted that its full-year results were impacted by several one-time items in both years, including the termination of a distribution agreement with BMG, various licensing extensions, and digital service provider true-up payments. Excluding these items, the underlying revenue growth was a healthier 7.9%.

Management Commentary and Strategic Focus

CEO Robert Kyncl highlighted the company's strong momentum, stating that "market share gains drove our quarterly revenues to an all-time high." He emphasized that the company's strategy is centered on increasing the value of music and pointed to "incremental revenue opportunities in AI" as a future growth vector. CFO Armin Zerza expressed confidence in the company's strategy, citing a "double digit revenue jump we delivered in Q4" and "stronger second half performance" as evidence that their plans are working. The leadership anticipates "sustained profitable growth in 2026."

Market Reaction and Looking Ahead

The market's initial reaction, a slight uptick in pre-market trading, indicates a balancing act between the positive surprise on sales and the disappointment on earnings. Investors are likely weighing the strong operational growth against pressures on profitability, which may be linked to investments in restructuring and other strategic initiatives.

Looking forward, analyst estimates for the coming year provide a benchmark for future performance. For the full fiscal year 2026, the consensus sales estimate stands at $6.97 billion. For the upcoming first quarter of 2026, analysts are projecting sales of $1.76 billion. While the company expressed an optimistic outlook for "sustained profitable growth," it did not provide specific quantitative guidance to compare directly against these analyst forecasts.

For a detailed breakdown of historical earnings and future analyst estimates for Warner Music Group, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.