By Mauro Orru

Universal Music Group logged higher revenue in the fourth quarter after growth from subscriptions and streaming services beat analysts' expectations despite signs of cooling.

The record label behind Taylor Swift posted revenue of 3.44 billion euros ($3.71 billion) for the three months to the end of December, up 7.9% on year at constant currency. Analysts had forecast revenue of 3.27 billion euros, according to consensus estimates by Visible Alpha.

Revenue from subscriptions and streaming grew 5.6% at constant currency to 1.60 billion euros, above analysts' 4.1% forecast. However, that marked a slowdown from 6.2% growth that Universal reported for the third quarter.

Growth in music subscriptions and streaming services has been cooling following a boom during the pandemic, when live events shut down and listeners stuck at home turned to streaming services for entertainment.

Subscriptions and streaming continue to be key focuses for investors as those services, part of Universal's recorded music business, account for the lion's share of revenue.

The company said last year that it was betting on subscriptions to grow revenue and earnings through the end of 2028, aiming to cash in on new subscribers by converting customers in ad-supported tiers to premium subscriptions to boost the average revenue per user.

The record label said revenue from subscriptions in the fourth quarter grew 9% at constant currency to 1.23 billion euros. However, streaming revenue contracted 4.1% at constant currency to 375 million euros as Universal said users were increasingly shifting from better-monetized video platforms to short-form versions that aren't yet as lucrative.

Analysts had forecast 5.1% growth in subscriptions revenue and 1% growth in streaming revenue, according to Visible Alpha.

Universal's physical revenue, which includes CD and vinyl sales, increased 3.4% at constant currency to 458 million euros. The company said top sellers for the quarter included Taylor Swift, Sabrina Carpenter, Billie Eilish, Chappell Roan and Wicked: The Soundtrack.

Adjusted earnings before interest, taxes, depreciation and amortization--Universal's preferred measure of profitability--grew to 799 million euros in the quarter from 677 million euros, generating a 23.2% adjusted margin. Analysts had forecast adjusted Ebitda of 721.4 million euros, according to Visible Alpha.

For the year as a whole, the company posted a net profit of 2.09 billion euros, compared with 1.26 billion euros in 2023. Universal said it would propose a dividend of 0.52 euros a share for 2024 at its shareholders' meeting, above the 0.51 euros a share it proposed for 2023.

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

(END) Dow Jones Newswires

March 06, 2025 12:21 ET (17:21 GMT)

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