Warner Music Group (NASDAQ:WMG) Announces Earnings Results, Misses Expectations By $0.07 EPS

Warner Music Group (NASDAQ:WMG) posted its quarterly earnings data on Thursday. The company reported $0.33 earnings per share for the quarter, missing the consensus estimate of $0.40 by ($0.07), Zacks reports. The firm had revenue of $1.84 billion during the quarter, compared to analyst estimates of $1.77 billion. Warner Music Group had a net margin of 5.44% and a return on equity of 47.78%. Warner Music Group’s revenue was up 10.4% compared to the same quarter last year. During the same period in the previous year, the company posted $0.45 earnings per share.

Here are the key takeaways from Warner Music Group’s conference call:

• Warner delivered a strong Q1 with total revenue +7%, adjusted OIBDA +22%, a ~310bp margin expansion, and cash up >$200M to $751M with near-100% operating cash conversion this quarter.
• Management is aggressively monetizing AI, signing consumption-based deals with partners like Suno, Stability, KLAY, and Udio, expecting these arrangements to be a material growth driver beginning in fiscal 2027 and to enable higher ARPU via “super‑fan” tiers.
• The company increased its catalog-buying firepower by expanding the Bain JV capacity (from $1.2B to ~$1.65–$1.7B) and plans to deploy a significant portion this fiscal year to buy high‑margin catalogs that should boost margins and recurring revenue.
• Some near-term headwinds remain — physical sales declined 11%, Asia performance lags (leadership changes underway), and the roll-off of BMG digital distribution will reduce revenue (Q1 impact ~$6M; ~\$10M estimated each quarter Q2–Q4), while AI outcomes still carry execution and adoption risk.

Warner Music Group Trading Up 3.7%

Shares of NASDAQ:WMG opened at $29.24 on Friday. Warner Music Group has a 1-year low of $25.56 and a 1-year high of $36.64. The stock has a market capitalization of $15.28 billion, a price-to-earnings ratio of 41.77, a PEG ratio of 0.67 and a beta of 1.24. The company has a debt-to-equity ratio of 5.77, a quick ratio of 0.64 and a current ratio of 0.66. The company has a 50 day moving average price of $29.50 and a 200 day moving average price of $31.12.

Warner Music Group Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, March 3rd. Shareholders of record on Wednesday, February 18th will be issued a $0.19 dividend. This represents a $0.76 dividend on an annualized basis and a yield of 2.6%. The ex-dividend date of this dividend is Wednesday, February 18th. Warner Music Group’s dividend payout ratio is presently 108.57%.

Institutional Trading of Warner Music Group

Several institutional investors have recently made changes to their positions in the stock. Millennium Management LLC grew its position in Warner Music Group by 178.5% in the third quarter. Millennium Management LLC now owns 3,183,654 shares of the company’s stock valued at $108,435,000 after purchasing an additional 2,040,425 shares in the last quarter. UBS Group AG increased its position in shares of Warner Music Group by 112.8% in the third quarter. UBS Group AG now owns 2,226,151 shares of the company’s stock valued at $75,823,000 after acquiring an additional 1,180,256 shares during the last quarter. Freestone Grove Partners LP bought a new stake in Warner Music Group during the third quarter worth about $36,821,000. Man Group plc grew its stake in Warner Music Group by 906.0% in the third quarter. Man Group plc now owns 928,204 shares of the company’s stock valued at $31,615,000 after purchasing an additional 835,940 shares in the last quarter. Finally, BNP Paribas Financial Markets increased its position in shares of Warner Music Group by 2,215.3% during the 3rd quarter. BNP Paribas Financial Markets now owns 561,774 shares of the company’s stock worth $19,134,000 after purchasing an additional 537,510 shares during the last quarter. 96.88% of the stock is currently owned by institutional investors and hedge funds.

More Warner Music Group News

Here are the key news stories impacting Warner Music Group this week:

• Positive Sentiment: Top‑line beat and streaming growth: Revenue rose ~10% YoY to $1.84B, above consensus, driven by recorded‑music and subscription streaming strength — a core growth driver for future earnings. Warner Music Quarterly Revenue Rises 10% on Recorded Music & Streaming Growth
• Positive Sentiment: Operating profit improvement: Operating profit and gross profit increased year‑over‑year, showing operating leverage even as EPS fell — supports medium‑term margin thesis. Warner Music Posts Quarterly Revenue Gain to $1.8 Billion on Streaming Growth and Hit Releases
• Positive Sentiment: Quarterly dividend declared: WMG announced a $0.19 quarterly dividend (yield ~2.7%), payable March 3 (ex‑div Feb 18) — adds income appeal for yield‑seeking holders. (Company filing summary)
• Neutral Sentiment: Strategic updates — AI and catalog plans: Management discussed catalog acquisition plans and use of AI on the call; these are strategic growth levers but will require execution/time to materialize. WMG’s Q1 Earnings: What You Need to Know, From Catalog Acquisition Plans to How It’s Using AI
• Neutral Sentiment: Full disclosure & materials available: Earnings press release, slide deck and call transcript published — useful for digging into segment detail and guidance assumptions. Warner Music Group Corp. (WMG) Q1 2026 Earnings Call Transcript
• Negative Sentiment: EPS and net income weakness: EPS of $0.33 missed consensus (~$0.37–$0.40) and net income declined vs. prior year, which prompted near‑term investor disappointment and headline selling. Warner Music Group Corp. (WMG) Q1 Earnings Lag Estimates
• Negative Sentiment: Weaker cash generation and higher liabilities: Operating cash fell and total liabilities increased year‑over‑year; balance‑sheet leverage remains a watch‑item for risk‑averse investors. Warner Music Group Corp. (WMG) Stock Rises on Q1 2026 Earnings
• Negative Sentiment: Immediate market reaction mixed: Coverage shows both after‑hours declines (~4–5%) and short positive moves in some feeds — reflecting the tug‑of‑war between revenue beats and EPS/cash‑flow misses. Warner Music Group posts mixed Q1 results, shares fall 4%

Analysts Set New Price Targets

Several brokerages have weighed in on WMG. The Goldman Sachs Group restated a “neutral” rating on shares of Warner Music Group in a research report on Tuesday, November 25th. UBS Group set a $33.00 target price on shares of Warner Music Group in a research note on Friday, November 21st. Wells Fargo & Company set a $39.00 price target on Warner Music Group and gave the stock an “overweight” rating in a research note on Tuesday, October 14th. Weiss Ratings restated a “hold (c)” rating on shares of Warner Music Group in a report on Monday, December 29th. Finally, Citigroup dropped their price target on Warner Music Group from $41.00 to $40.00 and set a “buy” rating for the company in a research note on Wednesday, January 21st. Eleven research analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $35.35.

Warner Music Group Company Profile

Warner Music Group is a major global music company that operates across recorded music and music publishing. Its recorded-music business comprises a portfolio of well-known labels—including Atlantic, Warner Records and Parlophone—as well as distribution and artist-services operations that support both established and emerging artists. The company’s publishing arm, Warner Chappell Music, manages songwriting catalogs and administers rights for compositions across multiple media, providing licensing for film, television, advertising and other commercial uses.

WMG’s activities span the full music value chain: signing and developing artists, producing and marketing recordings, distributing music through physical channels and streaming platforms, and monetizing rights through licensing, synchronization and neighboring-rights collection.