What to Expect from Warner Music Group’s Next Earnings Call

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Warner Music Group has scheduled its fiscal 2021 first quarter earnings call (covering the three months ending December 31, 2020) for Monday, February 1. Here’s a quick rundown of what to expect from the Big Three record label’s latest performance report.

Warner Music Group (WMG) announced yesterday, in a formal statement, that it had scheduled the first quarter earnings call for the fiscal year for the first day of February. (SiriusXM will release its own earnings breakdown, for the same three-month period, on Tuesday the 2nd, and Spotify will follow up with a report on the 3rd.) WMG will make its tax analysis publicly available beginning February 1, while the conference call itself is scheduled to begin at 4:30 PM EST, half an hour after the market close.

Based on this last point, this will be the first fiscal year first quarter earnings report that Warner Music Group has delivered since it returned to the stock market in June 2020, in what was the largest initial public offering of the year. . WMG shares briefly approached $ 40 each (from $ 25 each) at the end of December, and the shares are currently hovering around a value per share of nearly $ 36. The next performance analysis could determine whether Warner shares Music that is approximately eight months old will hit $ 40 per share in the near future.

Perhaps the most important conclusion of WMG’s fiscal 2020 fourth quarter earnings report was the continued increase in the company’s digital earnings. Warner Music’s quarterly revenue was flat year-over-year ($ 1,126 billion in the fourth quarter of fiscal 2020 compared to $ 1,124 billion in the fourth quarter of fiscal 2019), but within the latter of the two totals , a robust demonstration of digital managed to offset the declines attributable to the COVID 19 pandemic.

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To be sure, Warner / Chappell’s overall earnings fell from $ 173 million to $ 169 million, during the fourth quarter of fiscal 2019 and 2020, respectively. But digital publishing revenue rose $ 24 million year-over-year, part of an overall 15.4 percent increase in digital earnings from the same period in 2019. In total, digital accounted for nearly 70 percent of sales. Warner Music Group’s revenue in the fourth quarter of fiscal 2020, compared to 60 percent during the same window in 2019.

Consequently, logic suggests that investors could focus on WMG’s digital performance in the next earnings report. More generally, with concerts and music festivals still on hold, this revenue will have to once again supplement the clear drop in revenue in certain categories. (In the fourth quarter of fiscal 2020, “artist services and expanded rights” fell $ 73 million year-over-year, while publishing revenue attributable to performances decreased by $ 20 million.)

Earlier this month, Warner Music Group participated in Roblox’s $ 520 million Series H funding round, and several WMG executives received substantial shares of their company’s “long-term incentive plan.”

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