Universal Music Group Revenue Up 7% to $12.8 Billion in 2024

Growth in recorded music, publishing and merchandise helped Universal Music Group (UMG) post strong revenue growth in both the fourth quarter and full year 2024, while cost savings from layoffs helped the company produce even better earnings gains. 

Driven by an 8.2% increase in recorded music subscription revenue, full-year revenue was up 6.5% (7.6% at constant currency) to 11.83 billion euros ($12.8 billion). With a lower cost base, adjusted earnings before interest, taxes, depreciation and amortization (EDITDA) improved 13.8% to 2.66 billion euros ($2.88 billion), while adjusted EBITDA margin climbed to 22.2% from 21.3% in 2023. 

During Thursday’s earnings call, CEO Lucian Grainge called 2024 “a tremendously successful year for us at UMG” and cited the company’s “healthy revenue and double-digit adjusted EBITDA growth for each and every year since 2021 when UMG became a standalone public company.” He rattled off a host of UMG’s accomplishments for the year, including having four of the top five artists on Spotify and nine of the top 10 artists — and all of the top five — on the IFPI Global Artist Chart. UMG also had the two biggest new artist breakthroughs of 2024 in Chappell Roan and Sabrina Carpenter. Roan won the Grammy for best new artist in February.  

In the recorded music segment, full-year revenue increased 5.2% (6.4% in constant currency) to 8.9 billion euros ($9.63 billion). Adjusted EBITDA climbed 11.4% to 2.28 billion euros ($2.47 billion). Streaming revenue grew 5.9% to 6.04 billion euros ($6.54 billion), with subscription revenue doing the heavy lifting, rising 8.2% while other streaming revenue — namely ad-supported streaming — fell 0.8%. Downloads and other digital revenue dropped 13.0% but accounted for just 180 million euros ($195 million), or roughly 2% of recorded music revenue. Physical revenue fell 1.6% (up 1.1% in constant currency) to 1.36 billion euros ($1.47 billion). Licensing and other revenue jumped 12.9% to 1.33 billion euros ($1.44 billion).

In music publishing, full-year revenue rose 8.4% (9.0% in constant currency) to 2.12 billion euros ($2.29 billion) and adjusted EBITDA improved 8.7% to 511 million euros ($553 million). Led by strong streaming growth, digital revenue improved 12.4% to 1.27 billion euros ($1.37 billion) and accounted for 60% of total publishing revenue. Performance revenue grew 6.3% to 442 million euros ($478 million). Synch revenue fell 0.4% to 253 million euros ($274 million). Mechanical royalties dropped 4.6% to 103 million euros ($112 million). 

Full-year merchandise revenue grew 19.3% to 842 million euros ($911 million), although adjusted EBITDA declined 8.5% to 43 million euros ($47 million). UMG COO/CFO Boyd Muir said the revenue growth reflected “robust superfan demand that is driving strong growth in both direct-consumer and touring revenue.” The lower EBITDA resulted from lower-margin touring merchandise sales, said Muir, though UMG expects merchandise margins to improve as the company ramps up its direct-to-consumer business. 

UMG experienced 75 million euros ($81 million) of cost savings in 2024 in the first phase of a 250-million-euro ($270 million) cost savings program. Muir said the company will provide an update on the second phase of the program at a later date and added the implementation “remains on — if not slightly ahead of — schedule.” When UMG announced its cost-savings plan in February 2024, Grainge said the redesign “carefully preserves what we’re best at: creative A&R, marketing independence, unique label brand identities” and an entrepreneurial and competitive spirit.

Cash paid for catalog acquisitions grew to 266 million euros ($288 million) in 2024 from 178 million euros ($193 million) in 2023. Last year’s figure included the acquisition of the remaining stake in RS Group in Thailand and the completion of a 2023 catalog acquisition. UMG had a busy M&A year, buying the remaining share of [PIAS] and investing in Chord Music Partners, NTWRK and Mavin Global. As a result of that activity, free cash flow fell to 523 million euros ($566 million) in 2024 from 1.08 billion euros ($1.17 billion) in the prior year. 

Comprehensive fourth-quarter revenue grew 7.2% to 3.44 billion euros ($3.67 billion), or 7.9% in constant currency. Adjusted EBITDA jumped 19.1% to 799 million euros ($852 million). Adjusted EBITDA margin rose to 23.2% from 21.1%. Excluding one-time items, fourth quarter revenue was up 6.1% in constant currency. That non-recurring revenue included the 20 million euros ($21 million) of DSP catch-up income and 40 million euros ($43 million) of legal settlements.

Recorded music subscription revenue climbed 7.9% (9.0% in constant currency) in the fourth quarter, safely within the company’s prior long-term guidance of 8% to 10%, though it suffered a one-percentage-point hit from a decline in revenue from fitness platforms. Ad-supported streaming revenue fell 5.1% (4.1% in constant currency). Combined subscription and ad-supported streaming revenue grew 4.6% (5.6% at constant currency).