Netherlands' Universal Music Q3 revenue rises on subscription growth

Overview

• Netherlands-based music entertainment group's Q3 revenue rose 12.3% yr/yr, driven by Downtown acquisition

• Q3 adjusted EBITDA grew 9.0% in constant currency

• Subscription revenue growth accelerated, while merchandising revenue declined due to fewer major tours

Outlook

• Company did not provide specific guidance for future quarters or the full year

Result Drivers

• SUBSCRIPTION GROWTH - Recorded Music subscription revenue rose 19.2% in constant currency, supported by wholesale price increases and continued subscriber growth

• PHYSICAL SALES - Physical revenue increased 17.4% in constant currency, with broad-based strength across North America, Japan and Europe, and across both frontline and catalog

• EFFICIENCY INITIATIVES - Margin expansion in Recorded Music was attributed to lower relative A&R expense and improved cost discipline across marketing and overhead

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 6 "hold" and 5 "sell" or "strong sell"

• The average consensus recommendation for the entertainment production peer group is "buy"

• Wall Street's median 12-month price target for Universal Music Group N.V. is €20.00, about 27.1% above its October 28 closing price of €15.74

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 17 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)