Warner Music Rallies As Q3 Sales Top Estimates — But What's Behind the Net Loss?

Warner Music Group (NASDAQ:WMG) stock gained on Thursday after reporting fiscal third-quarter 2025 results.

GAAP EPS loss of 3 cents missed the analyst consensus estimate of 27 cents. Revenue increased 9% year-on-year to $1.69 billion, topping the analyst consensus estimate of $1.59 billion.

Recorded Music revenue increased by 8% Y/Y to $1.35 billion in the quarter. Music Publishing revenue grew by 10% Y/Y to $336 million. Digital revenue rose 5.3% Y/Y to $1.13 billion.

Also Read: Warner Music Shares Slide After Q2 Revenue Miss And Decline in Recorded Music Sales

Net loss was $16 million compared to net income of $141 million in the prior-year quarter. This was due to higher restructuring and impairment charges, increased amortization and stock-based compensation costs tied to executive departures, and the absence of prior-year one-time gains.

The company recorded a $70 million foreign exchange loss on Euro-denominated debt and $8 million in hedging losses. Compare that to the gains in the prior-year quarter. These headwinds outweighed revenue growth and gains in adjusted OIBDA, though a $25 million drop in income tax expense partially offset the loss.

Adjusted OIBDA increased by 18% compared to the previous year, reaching $373 million, and the margin rose by 180 basis points to 22.1%, primarily driven by revenue mix, the impact of acquisitions, and cost savings from the 2024 Strategic Restructuring Plan, partially offset by the reinvestment of these savings in the company’s business, including $7 million of incremental investment in technology.

Warner Music held $527 million in cash and equivalents as of June 30. It generated $46 million in operating cash flow, down from $188 million in the prior year quarter, driven by higher A&R (Artists and Repertoire) spend.

Warner Music Group CEO Robert Kyncl emphasized that the company prioritizes high-potential artists, songwriters, and markets, while expanding its iconic catalog and building teams and tools to maximize global impact.

Warner Music Group stock is down 0.16% year-to-date, as it has missed EPS estimates in at least three out of the last four quarters.

Price Action: WMG stock is up 3.46% at $31.08 at last check on Thursday.

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