Universal Music Logs Slower Subscriptions and Streaming Growth — Update

By Mauro Orru

Universal Music Group posted higher revenue for the third quarter as physical sales jumped, while growth in subscriptions and streaming services decelerated.

The record label behind Taylor Swift reported revenue of 3.02 billion euros ($3.50 billion) for the three months through September, up more than 10% on year at constant currency. Analysts had forecast revenue of 2.92 billion euros, according to consensus estimates by Visible Alpha.

Revenue from subscriptions and streaming grew 6.6% at constant currency to nearly 1.52 billion euros, slightly below analysts' forecast of 7% growth and marking a slowdown from the 8.7% growth recorded for the second quarter.

Subscriptions and streaming, part of Universal's recorded music business, remain a key focus for investors as the services account for the lion's share of revenue at the company. Platforms like Spotify and Apple Music pay royalties so they can offer Universal's expansive music catalog to their users.

Universal said revenue from subscriptions alone increased 8.7% at constant currency to 1.18 billion euros, lifted by a growing number of global subscribers. However, streaming revenue of 337 million euros didn't record any growth at constant currency in the quarter. Analysts had forecast growth of 8.2% in subscriptions and 3.15% in streaming, according to Visible Alpha.

The record label attributed the lack of streaming growth to changing consumer habits as users increasingly turn to short-form platforms to consume music as opposed to better monetized video platforms.

Universal's physical revenue, which includes CD and vinyl sales, jumped 23% at constant currency to 341 million euros. The company said initial shipments of Taylor Swift's "The Life of a Showgirl" and strength in new releases, particularly in Japan, had boosted sales.

The record label said the "KPop Demon Hunters" soundtrack, Mrs. Green Apple, Sabrina Carpenter and Morgan Wallen were among the top sellers for the quarter.

Adjusted earnings before interest, taxes, depreciation and amortization--Universal's preferred measure of profitability--increased to 664 million euros from 621 million euros a year earlier, generating a 22% adjusted margin. Analysts had forecast adjusted Ebitda of 649.4 million euros, according to Visible Alpha.

Universal's quarterly figures were released hours after the company said it had reached an agreement with artificial-intelligence startup Stability AI to develop professional music creation tools as the record label steps up efforts to leverage AI.

The group said it would explore new recording and composition concepts with Stability AI, liaising closely with artists to ensure the new tools are beneficial and not detrimental to their work.

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

(END) Dow Jones Newswires

October 30, 2025 14:01 ET (18:01 GMT)