# Warner Music Group (WMG.US)

Canonical: https://gigainvestors.com/s/WMG

Analysis as of: 2026-10-16T07:33:08.996Z. Financial observations: FY2002–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $30.69 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 1

- Operating margin variation: 0.62×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.06×

- FY2018: 0.05×

- FY2019: 0.08×

- FY2020: -0.05×

- FY2021: 0.11×

- FY2022: 0.12×

- FY2023: 0.13×

- FY2024: 0.13×

- FY2025: 0.10×

- LTM to Jun 2026: 0.14×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 23.0%

- ROIC, second-lowest year: 7.2%

- Typical minus recent gross margin: 1.1 pp

- Typical gross margin (annual median): 46.9%

- Recent gross margin (lower of latest and 3-year median): 45.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.5%

- ROIC including acquisitions, ten-year median: 10.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 7.2%

- FY2018: 7.2%

- FY2019: 14.3%

- FY2020: -18.2%

- FY2021: 29.8%

- FY2022: 32.2%

- FY2023: 29.5%

- FY2024: 31.3%

- FY2025: 19.7%

- LTM to Jun 2026: 26.3%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.16×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.4B

- Net income, five-year total: $2.1B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 1.4 pp

- Working capital / revenue, change between three-year averages: 10.8 pp

- Working capital / revenue, final three-year average: 16.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.37×

- FY2022: 1.02×

- FY2023: 1.21×

- FY2024: 1.44×

- FY2025: 1.64×

### management: pass

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 7.2% vs 29.5%

- Per-share earnings: 0.05 to 0.82 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.5%

- Ordinary dilution, 5-year annual growth: 0.7%

- Diluted shares, 10-year annual growth: 0.5%

- Diluted shares, 5-year annual growth: 0.7%

- Per-share value growth: 41.9%

- Per-share value change: $0.77

- Per-share value, starting three-year median: $0.05

- Per-share value, ending three-year median: $0.82

- Buybacks concentrated in cheaper years (correlation): 0.00

- Average buyback yield: 0.1%

- Buyback history: 4 years

- Debt-funded buybacks: No

- Acquisition spending: $1.3B

- Cumulative net income, 10 years: $2.3B

- ROIC, first three-year median: 7.2%

- ROIC, last three-year median: 29.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.05

- FY2017: $0.28

- FY2018: $0.61

- FY2019: $0.51

- FY2020: -$0.93

- FY2021: $0.59

- FY2022: $1.06

- FY2023: $0.82

- FY2024: $0.84

- FY2025: $0.69

### accounting: pass

- Sloan accruals: -3.2%

- Receivables to sales index (DSRI): 1.02×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 8.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.86×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 7.64×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.9%

- FY2017: -6.9%

- FY2018: -2.2%

- FY2019: -2.4%

- FY2020: -14.6%

- FY2021: -4.6%

- FY2022: -2.4%

- FY2023: -3.0%

- FY2024: -3.5%

- FY2025: -3.2%

## Holders

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Nick Train](https://gigainvestors.com/LT): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 38% since Oct 2021 · "WMG Q1 Earnings Call: Lighter Release Slate and Market Headwinds Weigh on Results" (finance.yahoo.com, Jun 2025) · sales +8.9%

Story as of 2026-10-16T09:59:52.374Z; price observation 2026-10-15.

- 2025-04-21: Warner Music Faces More Cautious Growth Outlook Amid Streaming Industry Headwinds, Morgan Stanley Says ([finance.yahoo.com](https://finance.yahoo.com/news/warner-music-faces-more-cautious-152533127.html))

- 2025-06-09: WMG Q1 Earnings Call: Lighter Release Slate and Market Headwinds Weigh on Results ([finance.yahoo.com](https://finance.yahoo.com/news/wmg-q1-earnings-call-lighter-162557678.html))

- 2025-07-02: Warner Music cuts jobs to generate $300M in savings ([seekingalpha.com](https://seekingalpha.com/news/4465003-warner-music-cuts-jobs-to-generate-300m-in-savings?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-04-09: Warner Music Poised to Benefit From Higher Wholesale Rate, Subscriber Growth, UBS Says ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/warner-music-poised-benefit-higher-154412220.html))

- 2026-05-12: WMG Q1 Deep Dive: Streaming, Catalog, and AI Drive Margin Expansion ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/wmg-q1-deep-dive-streaming-071655369.html))

### Sales · FY2025–2026

sales +8.9%; source https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm; observed 2025-11-20.

- FY2017: $3.6B 

- FY2018: $4.0B 

- FY2019: $4.5B 

- FY2020: $4.5B 

- FY2021: $5.3B 

- FY2022: $5.9B 

- FY2023: $6.0B 

- FY2024: $6.4B 

- FY2025: $6.7B 

- FY2026: $7.3B 

### Gross margin · FY2026

gross margin 45.8%; source https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm; observed 2025-11-20.

- FY2017: 46.0% 

- FY2018: 45.8% 

- FY2019: 46.3% 

- FY2020: 47.7% 

- FY2021: 48.3% 

- FY2022: 48.0% 

- FY2023: 47.4% 

- FY2024: 47.8% 

- FY2025: 45.8% 

- FY2026: 45.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in entertainment; annual sales are USD 6.7 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm (filed 2025-11-20); FY2025: revenue 6707000000; grossProfit 3075000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WMG.US: Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. It operates through Recorded Music and Music Publishing segments. The company is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials. It also owns and acquires rights to approximately two million musical compositions comprising pop hits, American standards, folk songs, and motion picture and theatrical compositions, as well as administers the music and soundtracks of various third-party television and film producers and studios. In addition, the company conducts its operation primarily through a collection of record labels, such as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin' Records, and Warner Classics and Warner Records Nashville. Further, it markets, distributes, and sells music and video products to retailers and wholesale distributors; independent labels to retail and wholesale distributors; and various distribution centers and ventures, as well as retail outlets, online physical retailers, streaming services, and download services. Its catalog includes songwriters and composers; and various genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, alternative, blues, gospel, and other Christian music. The company was founded in 1929 and is headquartered in New York, New York.

### Why customers stay

Margins ranged from 45.8% to 47.8% during 2023–25; it earns 23% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2023: grossProfit / revenue = 47.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2024: grossProfit / revenue = 47.8%.

- Source: https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm (filed 2025-11-20); FY2025: grossProfit / revenue = 45.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); 10-year return on capital observations [[2017,0.07184760344121262],[2018,0.07194761417953748],[2019,0.14345287739783152],[2020,-0.18181909547738692],[2021,0.29753743029562296],[2022,0.32239614689945817],[2023,0.29460659515781984],[2024,0.3131893415280752],[2025,0.1968598107913338],[2026,0.2627994298716833]]; median 0.22982962033150856. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 48% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm (filed 2025-11-20); Gross margin observations: [[2021,0.48273910582908885],[2022,0.4796418313904376],[2023,0.4737452377008448]]; range within 2 percentage points.

### Where the cash goes

Reinvests 7.7% of cash earnings; paid dividends in 9 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2016: growth capex 0; upkeep 67000000; cash acquisitions 28000000; owner earnings 251000000. Growth capex plus acquisitions / owner earnings = 0.11155378486055777.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2017: growth capex 0; upkeep 60000000; cash acquisitions 139000000; owner earnings 334000000. Growth capex plus acquisitions / owner earnings = 0.4161676646706587.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2018: growth capex 0; upkeep 88000000; cash acquisitions 23000000; owner earnings 480000000. Growth capex plus acquisitions / owner earnings = 0.04791666666666667.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2019: growth capex 0; upkeep 145000000; cash acquisitions 231000000; owner earnings 380000000. Growth capex plus acquisitions / owner earnings = 0.6078947368421053.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2021: growth capex 73465642.54599625; upkeep 500534357.45400375; cash acquisitions 64000000; owner earnings 111366629.75238717. Growth capex plus acquisitions / owner earnings = 1.2343521829801054.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2022: growth capex 0; upkeep 326000000; cash acquisitions 509000000; owner earnings 564000000. Growth capex plus acquisitions / owner earnings = 0.9024822695035462.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2023: growth capex 0; upkeep 241000000; cash acquisitions 126000000; owner earnings 519134396.35535306. Growth capex plus acquisitions / owner earnings = 0.24271171566476527.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); FY2024: growth capex 0; upkeep 116000000; cash acquisitions 40000000; owner earnings 627018828.4518828. Growth capex plus acquisitions / owner earnings = 0.06379393757402867.

- Source: https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm (filed 2025-11-20); FY2025: growth capex 0; upkeep 139000000; cash acquisitions 46000000; owner earnings 598797297.2972972. Growth capex plus acquisitions / owner earnings = 0.07682065401367608.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); Dividend observations: [[2016,0],[2017,84000000],[2018,925000000],[2019,94000000],[2020,344000000],[2021,265000000],[2022,318000000],[2023,340000000],[2024,361000000],[2025,383000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm (filed 2025-11-20); FY2025: cash repurchases 16000000 USD.

### Are managers owners

Insiders own 1.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WMG.US SharesStats.PercentInsiders = 1.05 percentage points; cache date 2026-10-16.

### What the price says

The price is 2.4 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-20); Closing price 30.69 USD; reporting-to-trading FX 1; FY2025 annual sales per share 12.678986307275144; price multiple 2.420540511380647. FY2025 cash earnings/share 1.131972973500193. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2020-06: $29.50 per share

- 2020-07: $30.15 per share

- 2020-08: $29.66 per share

- 2020-09: $28.74 per share

- 2020-10: $26.53 per share

- 2020-11: $29.73 per share

- 2020-12: $37.99 per share

- 2021-01: $35.09 per share

- 2021-02: $35.47 per share

- 2021-03: $34.33 per share

- 2021-04: $37.96 per share

- 2021-05: $35.89 per share

- 2021-06: $36.04 per share

- 2021-07: $37.79 per share

- 2021-08: $38.00 per share

- 2021-09: $42.74 per share

- 2021-10: $49.49 per share

- 2021-11: $43.33 per share

- 2021-12: $43.18 per share

- 2022-01: $42.50 per share

- 2022-02: $36.22 per share

- 2022-03: $37.85 per share

- 2022-04: $29.77 per share

- 2022-05: $29.69 per share

- 2022-06: $24.36 per share

- 2022-07: $30.00 per share

- 2022-08: $26.77 per share

- 2022-09: $23.21 per share

- 2022-10: $26.02 per share

- 2022-11: $34.27 per share

- 2022-12: $35.02 per share

- 2023-01: $36.45 per share

- 2023-02: $31.56 per share

- 2023-03: $33.37 per share

- 2023-04: $30.47 per share

- 2023-05: $24.45 per share

- 2023-06: $26.09 per share

- 2023-07: $31.55 per share

- 2023-08: $33.30 per share

- 2023-09: $31.40 per share

- 2023-10: $31.30 per share

- 2023-11: $33.11 per share

- 2023-12: $35.79 per share

- 2024-01: $36.49 per share

- 2024-02: $34.93 per share

- 2024-03: $33.02 per share

- 2024-04: $33.00 per share

- 2024-05: $29.78 per share

- 2024-06: $30.65 per share

- 2024-07: $30.01 per share

- 2024-08: $28.61 per share

- 2024-09: $31.30 per share

- 2024-10: $31.96 per share

- 2024-11: $32.52 per share

- 2024-12: $31.00 per share

- 2025-01: $31.80 per share

- 2025-02: $33.70 per share

- 2025-03: $31.35 per share

- 2025-04: $30.45 per share

- 2025-05: $26.32 per share

- 2025-06: $27.24 per share

- 2025-07: $29.26 per share

- 2025-08: $33.35 per share

- 2025-09: $34.06 per share

- 2025-10: $31.96 per share

- 2025-11: $28.24 per share

- 2025-12: $30.67 per share

- 2026-01: $29.98 per share

- 2026-02: $28.60 per share

- 2026-03: $25.54 per share

- 2026-04: $28.27 per share

- 2026-05: $31.54 per share

- 2026-06: $27.07 per share

- 2026-07: $25.96 per share

- 2026-08: $28.21 per share

- 2026-09: $27.61 per share

- 2026-10: $30.69 per share

## Annual estimated value (USD per share)

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:38:54.908Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1319161/000131916125000034/wmg-20250930.htm); period 2025-09-30, filed 2025-11-20.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.