UMG Revenue Grows to $3.38B on Subscription & Publishing Gains as Physical, Merch Take a Hit

Buoyed by hits by Morgan Wallen and Sabrina Carpenter, Universal Music Group (UMG) had revenue of 2.98 billion euros ($3.38 billion) in the second quarter, up 4.5% in constant currency, which removes the effects of foreign exchange changes. On a reported basis, which takes foreign exchange into account, revenue was up 1.6%.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a common measure of profitability that removes some non-operational expenses, rose 7.3% in constant currency (4.2% as reported) to 676 million euros ($766 million). Adjusted EBITDA margin rose to 22.7% from 22.1%.

“We are pleased with the strong growth in subscription, ad supported [streaming] and music publishing revenue, which more than offset particularly difficult comparisons in physical and merchandising revenue,” COO Boyd Muir said during the earnings call on Thursday (July 31).

In UMG’s recorded music segment, second quarter revenue grew 3.9% (1.1% as reported) to 2.22 billion euros ($2.5 billion). Subscription revenue of 1.2 billion euros ($1.36 billion) was up 8.5% (5.3% as reported), putting UMG in line with its targeted subscription growth rate of 8 to 10%. According to Muir, the improvement was driven mainly by the growth in the number of subscribers in established markets including the U.S. and Japan that have relatively high average revenue per user. Price increases, he added, played “a much lesser” role.   

Streaming revenue, which includes ad-supported royalties, rose 9.1% (4.4% as reported) to 358 million euros ($406 million). Muir attributed the improvement to “modest, incremental improvements in account performance and monetization across most of our major partnerships.” The improvement also reflects the timing of licensing deals. Meta stopped licensing premium music videos in May 2023, which created a challenging comparable in the second quarter of 2024. Also, UMG was off TikTok for a month until a May 2024 licensing deal ended a three-month standoff, which gave UMG an easier comparison in the second quarter of 2025.

Recorded music revenue took a hit from a 12.4% drop (13.2% as reported) in physical revenue, to 310 million euros ($351 million). UMG attributed the decline to a difficult comparable quarter due to last year’s release schedule. License and other revenue dropped 6.5% (7.9% as reported) to 290 million euros ($329 million).

Music publishing revenue jumped 14.5% in constant currency (11.5% as reported) to 570 million euros ($646 million). Digital revenue climbed 16.2% (12.9% as reported) due to growth in streaming and subscription revenue. Performance revenue increased 13.3% (11.0% as reported) and sync revenue climbed 11.9% (8.2% as reported). Both mechanical and other revenue improved 7.7% (both in constant currency and as reported). “The strong [publishing] growth also reflects the Chord [Music Partners] administration business, as well as our continued success in growing our film and TV administration business,” said Muir.

Merchandising and other revenue fell 12.7% (15.4% as reported) to 192 million euros ($218 million). The decline stemmed from a challenging comparison in the prior-year quarter when Taylor Swift drove direct-to-consumer (DTC) sales. Muir also pointed to higher manufacturing and freight costs due to both product mix and higher tariffs. “We’re taking several steps to improve the profitability of our merchandising business, including investing in our DTC business and working on ways to reconfigure our manufacturing supply chain,” he said.

Summary of UMG’s Q2 results (growth figures in constant currency):