Universal Music Shares Slide on Weak Revenue, Earnings

By Mauro Orru

Shares in Universal Music Group fell after the company behind Lady Gaga and Taylor Swift reported weak revenue and earnings for the first quarter, despite resilience in subscriptions and streaming.

The world's largest music company said revenue for the three months to the end of March grew 8.1% on year at constant currency to 2.90 billion euros, equivalent to $3.39 billion. Analysts had forecast 2.94 billion euros in revenue, according to Visible Alpha.

Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization--Universal's preferred measure of profitability--slipped to 636 million euros from 661 million euros a year earlier, generating a 21.9% adjusted margin. Analysts had forecast adjusted Ebitda of 667 million euros, according to Visible Alpha.

Figures include a contribution from the acquisition of Downtown Music Holdings that Universal's Virgin Music Group completed in February. Universal Music shares in Amsterdam fell more than 7% on Thursday. The stock has fallen about 30% over the past 12 months.

While total revenue and earnings came in slightly below expectations, revenue from subscriptions and streaming remained healthy, growing 10.9% at constant currency to 1.64 billion euros, accelerating from 8.1% growth that the company recorded for the fourth quarter. Analysts had projected 9.4% growth.

Revenue from subscriptions alone grew 12.5% at constant currency to 1.30 billion euros, thanks to price increases. Streaming revenue increased 5% at constant currency to 339 million euros. Analysts had forecast 10.7% growth in subscriptions and 5.4% growth in streaming, according to Visible Alpha.

Physical revenue--which includes vinyl sales--grew 12.7% at constant currency to 310 million euros, thanks to strength in the U.S. and Japan. Top sellers for the quarter included BTS, Olivia Dean, Taylor Swift, the "KPop Demon Hunters" soundtrack and Morgan Wallen.

Universal's first-quarter figures came weeks after its board started reviewing a takeover proposal from Bill Ackman's Pershing Square Capital that valued the company at more than $60 billion.

The group said Wednesday that its share price was undervalued relative to its business performance and prospects, and opted to increase the size of its 500 million-euro share buyback to 1 billion euros. Universal also said it would channel half of its 3.1% equity stake in Spotify into the enlarged buyback.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

April 30, 2026 04:56 ET (08:56 GMT)