Universal Music Group (UMG) reported revenue of €2.9 billion for the first quarter, up 8.1% year-on-year in constant currency, with gains across recorded music and publishing.
Alongside its results, the company outlined a shift in capital strategy. UMG will increase its share buyback authorisation and sell down part of its stake in Spotify. It plans to offload half of its holding, currently valued at €2.7 billion. The proceeds will fund the buyback programme, with a portion also set to be distributed to artists.
The decision comes after calls from investor Pershing Square to monetise the stake.
UMG pointed to multiple drivers behind its quarterly performance, including the integration of Downtown following its acquisition, early impact from updated “Streaming 2.0” pricing structures, stronger physical sales, and stable synchronisation income.
The company said the Downtown deal adds infrastructure and capabilities in the label and artist services segment, which it expects to remain a growth area.
Recorded music revenue increased 8.9% year-on-year. Subscription streaming revenue rose 12.5%, supported in part by the Downtown integration, while non-subscription streaming grew 5.0%.
Physical sales were up 12.7%, with demand led by markets such as Japan and the US.
Top-performing releases during the quarter included projects from BTS, Olivia Dean, Taylor Swift and Morgan Wallen, along with the KPop Demon Hunters soundtrack.
Music publishing revenue grew 7.0% year-on-year.
Adjusted EBITDA stood at €636 million, down 3.8% compared to the same period last year.
Sir Lucian Grainge, chairman and CEO of UMG, said, “We delivered a solid quarter of growth in our core businesses, complemented by our strategic development and investment in fast-growing areas of the industry. We continue to build the most successful music company in history by attracting the world’s top talent, engaging fans globally, and delivering long-term value for stakeholders. Central to that mission is fostering an environment that protects artists and songwriters, champions human creativity, and embraces innovation at a pivotal moment for our industry.”
Matt Ellis added: “Against the backdrop of a healthy industry, we are consistently driving sustained revenue growth through our multi-faceted strategy, while continuing to expand EBITDA and reinvest for the future. In addition, the important steps we are announcing today to increase our share buyback authorisation and monetise a portion of our equity stake in Spotify will lead to enhanced shareholder value while maintaining the flexibility the Company requires to drive further success.”
