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Netherlands' Universal Music Q3 revenue rises on subscription growth

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

EUR 3.39 bln

Q3 EBITDA Margin

19.80%

Q3 EBITDA

EUR 672 mln

Q3 Adjusted EBITDA

EUR 729 mln


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


Reuters Recommended Reads

  • Oct 29 - Europe Inc heads for second-best earnings season since 2022

  • Oct 28 - New CEO says Heineken must do better even as Q3 sales top forecast

  • Oct 28 - Unilever tops Q3 sales estimates, raises dividend


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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