Universal Music Group (UMG) reported revenue of €3.394 billion ($3.9 billion) for the third quarter of 2026, recording an 11.7% year-on-year increase at constant currency. The results, announced on October 29, reflect continued growth across its recorded music and publishing businesses, with subscription streaming and physical music sales contributing significantly to the performance.
The reported growth includes the contribution of Downtown Music Holdings, which UMG acquired in February 2026. Excluding Downtown, revenue grew 5.3% year-on-year at constant currency, offering a clearer picture of the performance of the company’s existing businesses.
Recorded Music remained UMG’s largest revenue contributor, generating €2.559 billion ($2.94 billion), up 14.7% year-on-year at constant currency. Excluding Downtown, the division recorded growth of 7.4%.
Subscription streaming was a key driver, with recorded music subscription revenue increasing 19.2% to €1.422 billion ($1.64 billion). Excluding Downtown, the increase stood at 9.5%. UMG attributed the growth to wholesale price increases and continued subscriber additions. The company also noted that market share pressures had moderated compared to the first half of 2026.
Combined subscription and ad-supported streaming revenue reached €1.809 billion ($2.08 billion), up 17.9%. Ad-supported streaming revenue increased 13.5% to €387 million ($445.2 million), supported by growth across digital and video platforms and improved per-play rates.
Physical music sales also recorded a strong quarter, increasing 17.4% to €392 million ($451 million). UMG reported growth across North America, Japan and Europe, with contributions from both new releases and catalogue titles. Olivia Rodrigo, Stray Kids, Ariana Grande, The Beatles and Mrs. GREEN APPLE were among the company’s top sellers during the quarter.
Music Publishing records 7.5% growth
UMG’s Music Publishing division generated €590 million ($678.8 million), up 7.5% year-on-year at constant currency. Excluding Downtown, growth stood at 1.5%.
Digital publishing revenue increased 11.8% to €370 million ($425.7 million), driven by subscription growth, although softer advertising-supported streaming revenue partially offset the gains. Performance royalties grew 1.7%, while synchronisation revenue remained flat. Excluding Downtown, synchronisation revenue declined 4.7%, reflecting lower film and television activity.
Downtown adds $224 million to quarterly revenue
Downtown Music Holdings contributed €195 million ($224.3 million) to UMG’s third-quarter revenue. Recorded Music accounted for €162 million, while Music Publishing contributed €33 million.
The acquisition has expanded UMG’s presence across music distribution, services and publishing. Its contribution is also significant when assessing the group’s reported growth against the more moderate performance of its existing businesses.
Adjusted EBITDA reaches €729 million
UMG reported adjusted EBITDA of €729 million ($838.7 million), representing a 9% year-on-year increase at constant currency. However, its adjusted EBITDA margin declined to 21.5% from 22% in the corresponding quarter last year. Excluding Downtown, the margin stood at 22.4%.
The Merchandising and Other division generated €248 million ($285.3 million), down 4.6% year-on-year. UMG attributed the decline primarily to lower touring income compared with a particularly strong prior-year quarter. Growth in direct-to-consumer merchandise sales partly offset the decline.
Commenting on the results, UMG Chairman and CEO Sir Lucian Grainge said the company would continue investing in artists, technology and the economics of streaming while improving operational efficiency.
“We are investing in human artistry, improving the economics of streaming, and expanding what’s possible for artists and fans. To support that strategy, we are making UMG faster and more focused so we can operate more efficiently and drive sustained growth and long-term value,” Grainge said.
UMG CFO Matt Ellis highlighted the acceleration in subscription revenue and the improvement in adjusted EBITDA margins excluding Downtown, pointing to stronger profitability in Recorded Music.
What the results indicate
For the global music business, UMG’s latest results reinforce two important developments: subscription streaming continues to be a major revenue driver, while physical formats remain commercially relevant across established music markets.
The distinction between reported growth and organic growth is equally important. While Downtown has added scale to UMG’s business, its exclusion brings the group’s underlying revenue growth down from 11.7% to 5.3%.
For markets such as India, where streaming plays a central role in music consumption, UMG’s focus on improving streaming economics and negotiating better pricing arrangements is worth watching. The company’s results also underline how global music groups are looking beyond recorded music sales, expanding their businesses across publishing, distribution and artist services.
