By Mauro Orru


Universal Music Group posted revenue above analysts' expectations for the first quarter, driven by growth in subscriptions and streaming.

The record label behind Taylor Swift, Billie Eilish and Ariana Grande on Thursday reported revenue of 2.59 billion euros ($2.78 billion) for the January through March quarter, up 5.8% on year in reported terms. Analysts had forecast revenue of EUR2.58 billion, according to consensus estimates compiled by Visible Alpha.

Taylor Swift, Noah Kahan, Morgan Wallen, Ariana Grande and Olivia Rodrigo were among the top sellers for the quarter.

Growing revenue shows that pricing from music streaming services, particularly for premium subscriptions, continues to play in Universal's favor. Spotify Technology is planning to raise prices again in the U.S. and some other markets, The Wall Street Journal reported last month.

The streaming giant increased the monthly subscription price for its most popular plan in the U.S. for the first time last year. Apple also raised prices for its music streaming service, as did Amazon.com.

Universal said revenue from subscriptions in the quarter jumped 12.5% at constant currency to EUR1.12 billion, citing the benefit of price increases at certain platforms and a growing base of subscribers globally. Streaming revenue grew more than 10% at constant currency to EUR343 million, helped by a recovery in the advertising industry.

In contrast, physical revenue, which includes CD and vinyl sales, slumped more than 14% at constant currency to EUR255 million due to what Universal called a very difficult year-over-year comparison, particularly in Japan.

Adjusted earnings before interest, taxes, depreciation and amortization--a key profitability metric for Universal--climbed to EUR591 million from EUR522 million, generating a 22.8% adjusted margin.

Universal's quarterly results come hours after the record label struck a new licensing deal with TikTok, allowing the return of its artists' songs to the popular video-sharing app after months of disagreements over pay.

The new deal includes better remuneration for Universal artists, and the companies said they were working to bring all music back to the platform.


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

05-02-24 1232ET