Netherlands' Universal Music Q3 revenue rises on subscription growth
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: ID:nPregx5cca
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
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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.)