Warner Music Group has posted its financial results for its first financial quarter, ending December 31, 2014.
On a constant currency basis, recorded music revenue was up 8%, while total revenue grew 7%, thanks to strong holiday sales. Digital revenue was also up 14%. Digital revenue represented 35.6% of total revenue, up from 33.9% in the same period the previous year.
Music publishing revenue declined 3.3% in constant currency. Performance revenue was also down 11.8%, driven by timing of collection society distributions. Mechanical revenue declined 14.8%, driven by the ongoing industry shift from physical to digital sales. Sync revenue was down 3.8%.
Operating income was $23 million (£15m) compared to $15m (£10m) in the same quarter the year before. Net loss was $41m (£27m) compared to $36m (£23m) in the prior-year quarter. According to WMG’s report, net loss was higher as a result of increased income tax expense due to losses in some countries for which no tax benefit could be realised.
Stephen Cooper, Warner Music Group’s CEO, said: “Some strong new releases, as well as outstanding execution by our operators around the world during the holiday season, made for an excellent start to our fiscal year.
“Our extraordinary roster of songwriters and artists, combined with our first-class management team and our sustained investment in new opportunities, means that we are well-positioned to build on this success as the industry evolves.”
Added Eric Levin, Warner Music Group’s executive vice president and CFO: “We are pleased with our top line performance as well as our improved free cash flow. “We remain keenly focused on growth and managing our expenses.”