Universal Music Shares Plunge After Subscriptions, Streaming Growth Underwhelm

By Andrea Figueras

Shares in Universal Music Group plummeted after growth in subscriptions and streaming revenue disappointed investors.

The music company behind Taylor Swift, Lady Gaga, and Bad Bunny booked second-quarter revenue of 3.29 billion euros, or $3.79 billion. That was more than 13% higher on year excluding currency movements and slightly higher than a Visible Alpha consensus of 3.27 billion euros.

However, revenue from subscriptions and streaming grew 15.4% at constant currency to 1.76 billion euros, slightly below analysts' forecast of 15.5% growth.

Universal Music shares in Amsterdam shed more than 23% in European morning trade, putting the stock on course for its second-largest one-day fall. Shares are down over 30% since January.

Subscriptions and streaming are a key focus for investors as they are part of the group's recorded music business, which accounts for the lion's share of revenue.

These services boomed at the height of the pandemic as listeners turned to digital platforms to enjoy their favorite artists when coronavirus restrictions brought live concerts to a standstill. However, growth has cooled in recent years.

Universal said revenue from subscriptions alone increased 16.6% at constant currency to 1.37 billion euros when including the acquisition of Downtown Music, below Visible Alpha consensus of 17.9% growth.

Analysts at Bernstein wrote in a note to clients that Universal's second-quarter figures were underwhelming at all levels.

Excluding the Downtown acquisition, the group posted a 6.7% increase in subscription revenue, below both the consensus of 9.3% and a 7.9% increase in the first quarter, the brokerage said. This development suggests an expected sequential improvement in subscription revenue growth will be delayed to the second half, the analysts noted.

The company reported adjusted earnings before interest, taxes, depreciation and amortization--its preferred measure of profitability--of 674 million euros compared with 676 million euros a year earlier. The result fell short of analysts' estimates of 707.9 million euros, according to Visible Alpha.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

July 31, 2026 04:59 ET (08:59 GMT)