Warner Music Group: FQ3 Alert: Pre-Reported Revenue/AOIBDA Ahead, RM Subscription at +11% CC

Research evidence excerpt

Warner Music Group: FQ3 Alert: Pre-Reported Revenue/AOIBDA Ahead, RM Subscription at +11% CC

J P M O R G A N North America Equity Research

03 August 2026

Warner Music Group Overweight

WMG, WMG US

FQ3 Alert: Pre-Reported Revenue/AOIBDA Ahead, RM Price (31 Jul 26):$25.96

Subscription at +11% CC

Media, Entertainment and

Warner Music Group pre-reported FQ3 earnings, including a beat on revenue/ Advertising

AOIBDA and reaffirmation of financial targets (i.e. HSD revenue growth, DD David Karnovsky, CFA AC

AOIBDA and EPS growth, 50-60% OCF conversion, margin expansion at high (1-212) 622-1206

end of 150-200bps). The 8-K follows another from Friday afternoon disclosing the david.karnovsky@jpmorgan.com

departure of CFO/COO Armin Zerza (given as personal reasons), and the Kiscada A Hastings

appointment of Tom Corson as COO and Louis Dickler as Acting CFO. We think (1-212) 622-0226

kiscada.hastings@jpmchase.com

a pre-release sought to calm investor expectations, especially after peer UMG

Alexey Philippov, CFA

missed consensus on read-through metrics (link). Looking more closely at the

(1-212) 622-0810

results, the revenue beat at RM was mainly from lower-margin line items with alexey.philippov@jpmorgan.com

some help from FX. RM subscription streaming growth of +11% FXN was below Douglas Wardlaw

our +13% underlying and 15.4% in FQ2, but closer to consensus and probably (1-212) 622 4885

better than feared after UMG’s report last week. Assuming less contribution from douglas.wardlaw@jpmchase.com

volume and only a modest incremental tailwind from price (relative to FQ2), the J.P. Morgan Securities LLC

result indicates continued share outperformance vs. peers (UMG/Sony Music

reported +7%/10%). MP revenue was ahead, led by Digital which grew 15%

constant currency.