By Mauro Orru

Universal Music Group's revenue from subscriptions and streaming services grew more than analysts had expected in the first quarter, buoying the record label behind Taylor Swift as the industry continues to shift toward digital consumption.

The world's largest music company logged revenue of 2.90 billion euros ($3.31 billion) for the three months to the end of March, up 9.5% on year at constant currency. Analysts had forecast revenue of 2.76 billion euros, according to consensus estimates by Visible Alpha.

Revenue from subscriptions and streaming grew 7.2% at constant currency to nearly 1.61 billion euros, above analysts' forecast of 5.1% growth. That marked a sequential acceleration from the 5.6% growth that Universal reported for the fourth quarter.

Subscriptions and streaming services boomed during the pandemic when concerts and live events shut down, forcing fans to turn to streaming apps to enjoy their favorite artists. Spotify Technology, Apple and Amazon.com all raised prices for their music streaming services in recent years, bringing in additional subscription revenue for record labels like Universal.

While growth has cooled from pandemic highs, revenue from subscriptions and streaming remains a key focus for Universal investors as those services, part of the label's recorded music business, account for the lion's share of sales.

Universal executives said last year that subscriptions would help the company grow revenue and earnings through the end of 2028.

The group said revenue from subscriptions alone jumped 9.3% at constant currency in the first quarter to 1.25 billion euros, citing growth in the number of global subscribers.

Streaming revenue grew just 0.3% to 353 million euros, with Universal saying that fans were ditching traditional and better-monetized video platforms in favor of short-form platforms that aren't yet as lucrative for the record label.

Analysts had forecast 6.9% growth in subscriptions revenue and a 1.3% contraction in streaming revenue on a standalone basis, according to Visible Alpha.

Universal's physical revenue grew more than 15% at constant currency to 300 million euros, driven by vinyl sales in the U.S. and Europe. The company said top sellers for the quarter included releases from Kendrick Lamar, Sabrina Carpenter, Lady Gaga, The Weeknd and Mrs. GREEN APPLE.

Adjusted earnings before interest, taxes, depreciation and amortization--Universal's preferred measure of profitability--increased to 661 million euros in the quarter from 591 million euros, generating a 22.8% adjusted margin. Analysts had forecast adjusted Ebitda of 647.4 million euros, according to Visible Alpha.

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

(END) Dow Jones Newswires

April 29, 2025 12:28 ET (16:28 GMT)

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