Warner Music Hits All The Right Notes With Blowout Quarter, Analyst Says More Growth Ahead

Warner Music Group Corp. (NASDAQ:WMG) shares traded higher Friday after the music entertainment company reported second-quarter results that topped Wall Street estimates, driven by strong streaming growth, margin expansion, and gains across recorded music and music publishing. Earnings Beat Expectations Warner Music reported second-quarter revenue of $1.732 billion, beating analyst estimates of $1.612 billion. Earnings came in at 35 cents per share, ahead of consensus estimates of 27 cents. Total revenue increased 17% year over year, or 12% in constant currency, supported by growth in both recorded music and music publishing operations. Adjusted OIBDA rose 31% year over year, or 24% in constant currency, to $397 million, reflecting improved operating leverage and cost discipline. Streaming Momentum Drives Growth The company said growth was fueled by accelerating streaming performance, supported by higher per-subscriber pricing and continued market share gains. Management also highlighted ongoing cost-saving initiatives and operational efficiencies, which helped drive margin expansion. Warner Music expects full-year margin expansion to land at the high end of its previously guided 150-basis-point to 200-basis-point range. Bain Joint Venture Expands Catalog Portfolio Warner Music also pointed to strategic progress through its joint venture with Bain Capital, which deployed $650 million to acquire recorded music and music publishing catalogs. The company said the acquisitions strengthen its long-term content portfolio and reinforce future revenue opportunities tied to owned intellectual property. Balance Sheet Position As of March 31, 2026, Warner Music reported cash and equivalents of $741 million and total debt of $4.719 billion. Analysts Raise Price Forecasts Analysts turned more bullish on Warner Music following the company's latest quarterly results and continued streaming momentum. Guggenheim Partners analyst Michael Morris raised his price forecast on the stock to $36 from $34 while maintaining a Buy rating. Morris said Warner Music delivered results that significantly exceeded expectations. He added that the higher valuation reflects an improved earnings growth outlook, supported by continued subscription streaming momentum and ongoing cost-efficiency measures. The analyst also said Warner Music is well-positioned to benefit from the broader adoption of artificial intelligence. According to Morris, the company's proprietary content library should remain a key driver of consumer demand as music distribution models continue to evolve. Separately, Evercore ISI analyst Vijay Jayant raised his price forecast on Warner Music to $43 from $37 while maintaining an Outperform rating. Warner Music Price Action WMG Price Action: Warner Music shares were up 5.69% at $32.80 at the time of publication on Friday, according to Benzinga Pro data. Photo via Shutterstock