Warner Music Group
Warner Music Group's revenue rose 4.4% to $6.7 billion in fiscal 2025. Its operating margin was 10.3%, down from 12.8% a year earlier. Free cash flow was $539 million, down 15.5%. It paid out $399 million in dividends and buybacks, 74% of free cash flow.
Operating margin is operating income as a share of revenue. Free cash flow is cash from operations minus capital spending. Return on capital is after-tax operating income as a share of the money invested in the business: debt plus equity, minus cash. Market cap is the last closing share price times the latest diluted share count, so it is approximate. P/E is the last close divided by diluted earnings per share over the last four quarters, or the latest fiscal year where the quarters aren't available; there is none when the company made a loss.
What Warner Music Group does
Warner Music Group finds, signs and promotes musicians and songwriters and earns money from their music. Its record labels include Atlantic Records, Warner Records, Elektra Records and Parlophone Records, with artists such as Ed Sheeran, Bruno Mars, Cardi B and Dua Lipa. Its music publishing arm, Warner Chappell Music, owns or manages the rights to more than two million songs by over 190,000 songwriters and composers.
It has two businesses. Recorded Music, which earns money mainly when people stream, buy or license its recordings, brought in $5.408 billion, or 81% of revenue, in the fiscal year that ended in September 2025. Music Publishing, which collects fees when songs are played, recorded or used in films, ads and games, brought in $1.306 billion, or 19%. It depends heavily on a small number of streaming services. Citing industry data, it says it, Universal Music Group and Sony Music Entertainment are the three largest record companies, with many smaller and independent labels competing too.
Access Industries, which bought the company in 2011, still controls it, holding about 98% of the voting power. Warner Music had about 5,500 employees in September 2025.
Its biggest risks, as it describes them
- Failing to find, sign and keep successful artists and songwriters, and depending on a few big stars.
- Slower growth in music streaming, which drives much of its revenue.
- Its dependence on a few large streaming services, which have strong bargaining power over it.
- Its heavy debt, which limits its flexibility and must be repaid or refinanced.
- Access Industries controls the company, and its interests may differ from those of other shareholders.
Charts show fiscal years, from the 10-K filings.
Revenue and margins
Net income and earnings per share
From fiscal 2016 to 2025, net income grew 34.7% a year; the filings' structured data doesn't give diluted earnings per share.
Returns on capital
Cash flow
Payouts and share count
Valuation
Two ways to value Warner Music Group yourself, both starting from its filings: a discounted cash flow model and the price-to-earnings method.
Discounted cash flow (DCF)
A discounted cash flow (DCF) model values a business as the cash it may generate in future, discounted back to today. The starting figures come from Warner Music Group's 10-K (or, for net cash and shares, its latest 10-Q) and the assumptions are yours: start from one of three example scenarios, then change any figure to see what it implies for a share, and how that compares with the last share price.
The example scenarios need Warner Music Group's diluted shares, which its filings' structured data doesn't give for its latest year. You can enter your own figure in the calculator.
- Last close, October 26, 2026
- $30.29
- Value on these assumptions, against the last close
- —
- Cash flows in years 1 to 10, valued today
- —
- Everything after year 10, valued today
- —
- Plus net cash
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- Share of value from after year 10
How the value changes with two assumptions
Price-to-earnings (P/E) method
Another common way to value a company is to multiply its earnings per share by a price-to-earnings (P/E) multiple: the number of years of today's earnings an investor pays for a share. A higher multiple usually means investors expect earnings to grow. Choose a multiple, for example from similar companies, to see the value it gives.
The P/E method needs positive earnings, and Warner Music Group's latest diluted earnings per share were not available.
Balance sheet
| Fiscal year end | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Cash and short-term investments | 499 | 584 | 641 | 694 | 532 |
| Debt incl. finance leases | 3,346 | 3,732 | 3,964 | 4,014 | 4,365 |
| Net debt (negative means net cash) | 2,847 | 3,148 | 3,323 | 3,320 | 3,833 |
| Net debt to EBITDA | 3.1x | 3.0x | 3.0x | 2.9x | 3.6x |
| Debt to equity | — | — | — | 7.8x | 6.8x |
| Interest coverage | 5.1x | 5.7x | 5.0x | 4.5x | 3.9x |
| Current ratio | 0.6x | 0.6x | 0.7x | 0.7x | 0.7x |
| Quick ratio | 0.6x | 0.6x | 0.6x | 0.7x | 0.6x |
Insider trades
Over the 12 months between October 27, 2025 and October 26, 2026, 2 insiders bought $2.0 million of Warner Music Group shares on the open market, and none sold any.
| Date | Insider | Trade | Shares | Price | Value | Filing |
|---|---|---|---|---|---|---|
| Dec 11, 2025 | Armin ZerzaChief Financial Officer | Bought | 35,778 | $28.12 | $1.0 million | Form 4 |
| Dec 2, 2025 | Valentin BlavatnikDirector | Bought | 35,810 | $27.88 | $998,383 | Form 4 |
Piotroski F-score
The F-score counts how many of nine simple tests of profitability, funding and efficiency a company passed in a year (Piotroski, 2000). The more tests passed, the stronger the year: 8 or 9 is strong, 0 to 2 weak. Companies that report no gross profit are scored on the other eight.
| Test | FY23 | FY24 | FY25 |
|---|---|---|---|
| Net income is positive | Pass | Pass | Pass |
| Cash from operations is positive | Pass | Pass | Pass |
| Return on assets rose | Fail | Fail | Fail |
| Cash from operations exceeds net income | Pass | Pass | Pass |
| Debt fell relative to assets | Pass | Pass | Fail |
| Current ratio rose | Pass | Fail | Fail |
| Share count didn't rise | — | — | — |
| Gross margin rose | Fail | Pass | Fail |
| Revenue rose relative to assets | Fail | Fail | Fail |
| F-score | — | — | — |
| Accruals ratio | −3.1% | −3.6% | −3.3% |
Compare
Put Warner Music Group side by side with any other company we cover: revenue, growth, margins, cash flow and returns, with ten years of charts.
Similar companies
| Company | Year | Revenue growth | Operating margin | Free cash flow margin | Return on capital | Net debt to EBITDA | F-score | Compare |
|---|---|---|---|---|---|---|---|---|
| Warner Music Group | FY25 | 4.4% | 10.3% | 8.0% | 12.2% | 3.6x | — | |
| AMC Entertainment | FY25 | 4.6% | −0.4% | −7.5% | −0.8% | 12.3x | 2 | Compare |
| Roku | FY25 | 15.2% | −0.1% | 10.1% | — | −58.0x | 6 | Compare |
| TKO Group | FY25 | −3.0% | 17.6% | — | 5.9% | 2.4x | 5 | Compare |
| Lionsgate Studios | FY26 | 1.8% | 3.7% | 0.4% | 8.3% | 13.9x | 5 | Compare |
10 years of figures
| Fiscal year | FY16 | FY17 | FY18 | FY19 | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||||
| Revenue | 3,246 | 3,576 | 4,005 | 4,475 | 4,463 | 5,301 | 5,919 | 6,037 | 6,426 | 6,707 |
| Revenue growth | 9.4% | 10.2% | 12.0% | 11.7% | −0.3% | 18.8% | 11.7% | 2.0% | 6.4% | 4.4% |
| Gross profit | 1,539 | 1,645 | 1,834 | 2,074 | 2,130 | 2,559 | 2,839 | 2,860 | 3,071 | 3,075 |
| Research and development | — | — | — | — | — | — | — | — | — | — |
| Operating income | 214 | 222 | 217 | 356 | −229 | 609 | 714 | 790 | 823 | 694 |
| Net income | 25 | 143 | 307 | 256 | −475 | 304 | 551 | 430 | 435 | 365 |
| Diluted EPS (US$) | — | — | — | — | — | — | — | — | — | — |
| Diluted shares (millions) | — | — | — | — | — | — | — | — | — | — |
| Cash flow | ||||||||||
| Cash from operations | 342 | 535 | 425 | 400 | 463 | 638 | 742 | 687 | 754 | 678 |
| Capital expenditure | 42 | 44 | 74 | 104 | 85 | 93 | 135 | 127 | 116 | 139 |
| Free cash flow | 300 | 491 | 351 | 296 | 378 | 545 | 607 | 560 | 638 | 539 |
| Dividends paid | 0 | 84 | 925 | 94 | 344 | 265 | 318 | 340 | 361 | 383 |
| Share buybacks | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 16 |
| Acquisitions | 28 | 139 | 23 | 231 | 94 | 64 | 509 | 126 | 40 | 46 |
| Stock-based compensation | 23 | 70 | 62 | 50 | 608 | 45 | 39 | 49 | 52 | 54 |
| Balance sheet at fiscal year end | ||||||||||
| Cash and short-term investments | 359 | 647 | 514 | 619 | 553 | 499 | 584 | 641 | 694 | 532 |
| Debt incl. finance leases | 2,778 | 2,811 | 2,819 | 2,974 | 3,104 | 3,346 | 3,732 | 3,964 | 4,014 | 4,365 |
| Total assets | 5,335 | 5,718 | 5,344 | 6,017 | 6,410 | 7,211 | 7,828 | 8,545 | 9,155 | 9,829 |
| Total liabilities | 5,125 | 5,410 | 5,664 | 6,286 | 6,455 | 7,165 | 7,660 | 8,115 | 8,480 | 9,072 |
| Shareholders' equity | 195 | 293 | −334 | −289 | −63 | 31 | 152 | 307 | 518 | 647 |
| Margins and ratios | ||||||||||
| Gross margin | 47.4% | 46.0% | 45.8% | 46.4% | 47.7% | 48.3% | 48.0% | 47.4% | 47.8% | 45.9% |
| Operating margin | 6.6% | 6.2% | 5.4% | 8.0% | −5.1% | 11.5% | 12.1% | 13.1% | 12.8% | 10.3% |
| Net margin | 0.8% | 4.0% | 7.7% | 5.7% | −10.6% | 5.7% | 9.3% | 7.1% | 6.8% | 5.4% |
| Free cash flow margin | 9.2% | 13.7% | 8.8% | 6.6% | 8.5% | 10.3% | 10.3% | 9.3% | 9.9% | 8.0% |
| Return on capital | 5.6% | 6.9% | 6.9% | 16.9% | −7.9% | 15.2% | 17.2% | 16.1% | 16.9% | 12.2% |
| Return on equity | — | — | — | — | — | — | — | — | — | 62.7% |
| Return on assets | 0.5% | 2.6% | 5.5% | 4.5% | −7.6% | 4.5% | 7.3% | 5.2% | 4.9% | 3.9% |
| Net debt to EBITDA | 4.8x | 4.6x | 4.8x | 3.8x | 79.7x | 3.1x | 3.0x | 3.0x | 2.9x | 3.6x |