Warner Music Reports $1.84 Billion in Q4 ’25 Revenue, Up 10.4%

Warner Music head Robert Kyncl.

Warner Music Group (WMG) has reported a 10% revenue jump – and a 27% net income slip – for Q4 2025 (its fiscal first quarter). Meanwhile, with all manner of AI deals and initiatives now picking up steam, execs are adamant that material growth is on the way.

All told, WMG generated $1.84 billion during 2025’s final three months, representing a 10.4% year-over-year (YoY) improvement. Factors including but not limited to BMG’s ADA split once again impacted the total, within which recorded music contributed $1.48 billion (up an even 10% YoY).

That said, recorded subscription revenue spiked 14.3% YoY to $721 million, compared to 7.2% YoY growth on the ad-supported side ($239 million total), a 17.9% YoY boost for artist services ($231 million), and a 10% YoY improvement for licensing ($121 million).

Of course, most of those percentages are equal to or higher than the overall recorded growth rate. Dragging the category down a bit was physical’s 8.4% YoY slip to $152 million, which execs attributed to a difficult prior-year comparison featuring releases from Linkin Park and others.

Finally, on the recorded front, operating income rose 38.2% YoY to $329 million, and the quarter’s top-sellers included Alex Warren, Sombr, Cardi B, and Ed Sheeran.

In publishing, Warner Chappell brought in $362 million (up 12.1% YoY) on the quarter, complete with $215 million (up 3.9% YoY) from digital sources including streaming and $60 million (up 53.8% YoY) from sync.

Company-wide, Warner Music’s operating income came in at $288 million (up 35% YoY) during Q4, with the initially mentioned net income totaling $175 million (down 27% YoY, once again). At the time of this writing, after-hours trades had bumped Warner Music stock (NASDAQ: WMG) about 1.3% to $28.60 or so per share.

Now for multiple interesting takeaways from Warner Music’s conference call, which, as far as earnings events go, provided the largest amount of worthwhile information in recent memory.

First, with TikTok actively overhauling its artist-compensation rules, Warner Music head Robert Kyncl confirmed that his company had inked an “improved deal” with the short-form giant.

“I’m also pleased to announce we’ve renewed our deal with TikTok, resulting in improved deal economics,” Kyncl said.

It will, of course, be interesting to see how the pact factors into Warner Music’s financials moving forward – though if Kyncl’s emphasis on the app’s promotional capabilities is any indication, the new terms might not be ushering in huge paychecks from the notoriously stingy platform.

“Obviously, I cannot disclose the deal terms of [the TikTok renewal], but it contains structural changes that better reflect the value of music, which we’re happy about,” he communicated.

“And also, our deals are never just about money. They’re also about data, promotion, insights, and all the things that can help advance our business overall,” he continued. “But having said all that, as a percentage of revenue, it’s in the lower single digits for the company.”

Also important here: the major’s deal with Suno, which WMG CFO Armin Zerza specified is “already earning several hundred millions” of dollars in annual revenue.

“We expect this partnership to be a material top- and bottom-line growth driver starting in fiscal 2027,” Zerza continued. “Our goal is to maximize fans’ ability to engage more deeply with the music they love… [W]e are also exploring opportunities with our large DSP partners to incorporate the AI tools that will enhance their consumer offerings.”

Underscoring this point, he and Kyncl emphasized in clear-cut terms the expectation that AI will factor into traditional DSPs’ superfan tiers en route to allowing ARPU to “dramatically increase.”

Plus, Kyncl touched on Warner Music talent’s “surprisingly high” engagement with higher-ups about possibly participating in third-party AI tools. Adjacent to said engagement, what of the “walled garden” debate? Per the CEO, this hot-button “issue is getting painted too much in black and white,” and “black and white is never the answer.”

“The decline post-Napster era could have been shorter had we been a little bit more flexible about [making music available online],” Kyncl summed up. “So we at Warner have learned from the past.”

Closer to the present, the execs further stressed that they’re leveraging AI to “accelerate new artist discovery,” automate marketing, handle certain legal-department functions, “generate assets like motion art and music videos” to enhance fan engagement, and a whole lot else.

Finally, Warner Music and Bain Capital have supersized their (previously) $1.2 billion JV, which now has $1.65 billion at its disposal.

“You can expect some exciting announcements coming in the near future, as we plan to deploy a significant portion of the JV’s total capacity by the end of this fiscal year,” added Zerza.