WMG left the industry reeling late on Friday (July 31), with the shock announcement that Armin Zerza was leaving his dual CFO and COO role, effective immediately — a departure the company attributed to “personal reasons.”
Zerza’s exit came just two months after WMG handed him that expanded COO remit on top of his CFO duties.
Today (August 3), WMG has made another unusual move – though one with a positive message for investors.
WMG has issued some headline “preliminary” numbers regarding its fiscal performance in calendar Q2.
The two standouts? Total revenues were up 9% YoY (at constant currency) in the quarter, while subscription streaming recorded music revenues rose 11% YoY.
There seems little doubt that WMG’s decision to announce its directional results so soon after the exit of its CFO carries a clear message: Zerza hasn’t left the building due to poor company performance. Indeed, the numbers themselves look reasonably rosy.
Having issued the preliminary figures, WMG has also pulled its official earnings date forward to Wednesday (August 5), from the previously scheduled August 6.
Zerza’s departure wasn’t the only important element of Warner‘s big Friday announcement: in his wake, Lou Dickler has stepped up to acting CFO of WMG, while Tom Corson has been promoted from his role at Warner Records to become COO of WMG itself.
Among the headline figures in the preliminary filing, WMG‘s overall revenues were up 9% YoY at constant currency to approximately $1.86 billion in calendar Q2 – the three months ended June 30, 2026 (the company’s fiscal Q3).
Recorded music streaming revenue is estimated to have reached approximately $1.001 billion in the quarter. That represents a 10% YoY increase at constant currency from $895 million in the prior-year period.
WMG noted that the growth in recorded music streaming was driven by subscription revenue growth of 11% YoY at constant currency and ad-supported revenue growth of 8% YoY at constant currency.
WMG did not break out the dollar values of its subscription and ad-supported lines, nor its artist services, licensing and physical revenues, in the preliminary filing; that detail is due with the full results on Wednesday.
After Universal Music Group‘s recorded-music subscription streaming revenues grew 6.7% YoY at constant currency in Q2 (its organic rate once the newly acquired Downtown Music Holdings is stripped out), and short of the roughly 9.3% analysts had forecast, some analysts questioned the growth path of the recorded-rights business. WMG’s own double-digit subscription streaming growth, on the same constant-currency basis, will likely be seen as an encouraging signal for the wider industry.
WARNER’S PRELIMINARY CALENDAR Q2 2026 IN SUMMARY (% IN CONSTANT CURRENCY):
- Overall revenues up 9% YoY at constant currency to approximately $1.86 billion;
- Recorded Music revenues up 9% YoY at constant currency to approximately $1.49 billion;
- Within that, Recorded Music streaming revenues up 10% YoY at constant currency to just over $1 billion;
- Recorded Music subscription streaming revenues up 11% YoY at constant currency;
- Music Publishing revenues – at Warner Chappell Music – up 11% YoY at constant currency to approximately $377 million.
Recorded Music revenue overall is estimated to have increased 9% YoY at constant currency to approximately $1.488 billion from $1.354 billion in the prior-year quarter.
Music Publishing revenue – at Warner Chappell Music – is estimated to have increased 11% YoY in constant currency to approximately $377 million from $336 million.
Consolidated digital revenue is estimated to have increased 9% YoY at constant currency to approximately $1.251 billion from $1.132 billion.
Music Publishing digital revenue is estimated to have increased 15% YoY at constant currency to approximately $235 million from $204 million in the prior-year quarter.
WMG‘s operating income is estimated to have increased 80% YoY (as reported) to approximately $305 million from $169 million in the prior-year quarter.
Adjusted OIBDA is estimated to have increased 15% at constant currency to approximately $433 million from $373 million.
The period-over-period increase was, according to WMG, “primarily attributable to strong operating performance in the quarter and savings from the Company’s restructuring plans“.
WMG: PROFITABILITY IN CALENDAR Q2 2026
- Net income attributable to WMG was approximately $204 million, versus a $16 million loss in the prior-year quarter;
- Operating income was approximately $305 million versus $169 million, up 80% (as reported);
- Adjusted OIBDA was approximately $433 million versus $373 million, up 15% YoY at constant currency;
- Adjusted OIBDA margin rose to 23.2%, from 22.1% in the prior-year quarter.
WMG reiterated its financial targets: high-single-digit consolidated revenue growth, double-digit Adjusted OIBDA and Adjusted EPS growth and 50–60% operating cash flow conversion.
The company also said it expects to deliver an Adjusted OIBDA margin increase at the high end of its 150–200 basis point target for the twelve months ended September 30, 2026.
The preliminary estimates follow a calendar Q1 in which WMG posted total revenue of $1.73 billion, up 12.1% YoY at constant currency, with recorded music subscription streaming revenues up 12.7% YoY at constant currency.
Zerza had added the COO title to his CFO role just two months before his departure, having originally joined WMG in May 2025 from Activision Blizzard.
All figures in the 8-K are described as preliminary estimates that are unaudited and subject to change as WMG completes its closing procedures.
All percentage changes referenced in this article are at constant currency unless otherwise stated.Music Business Worldwide
On July 31, 2026, Warner Music Group (WMG) surprised the industry with the announcement of Armin Zerza’s immediate departure from his dual role as CFO and COO, citing « personal reasons. » This decision came just two months after WMG expanded Zerza’s responsibilities to include the COO position alongside his CFO duties. The abrupt exit raised questions about the company’s stability, but WMG quickly sought to reassure investors by releasing preliminary fiscal performance figures for the second quarter (Q2) of the calendar year.
On August 3, WMG reported that total revenues for Q2 increased by 9% year-over-year (YoY) at constant currency, amounting to approximately $1.86 billion. Notably, revenues from recorded music streaming rose by 11% YoY, reflecting a strong growth trajectory. This data suggests that Zerza’s resignation is not linked to any underlying financial issues within the company, as the figures indicate a healthy performance.
In conjunction with the preliminary financial results, WMG also moved its official earnings date forward to August 5, 2026, from the initially scheduled August 6. Following Zerza’s departure, Lou Dickler was appointed as acting CFO, while Tom Corson was elevated from Warner Records to the position of COO for WMG.
The preliminary figures highlighted several key financial metrics for WMG during Q2 2026:
– Overall revenues increased by 9% YoY at constant currency, reaching approximately $1.86 billion.
– Recorded music revenues also rose by 9% YoY at constant currency, totaling about $1.49 billion.
– Recorded music streaming revenue was estimated at over $1 billion, reflecting a 10% YoY increase.
– Subscription streaming revenue grew by 11% YoY at constant currency.
– Music Publishing revenues at Warner Chappell Music increased by 11% YoY, amounting to approximately $377 million.
The growth in recorded music streaming was attributed to both subscription revenue growth (11% YoY) and ad-supported revenue growth (8% YoY), although WMG did not provide specific dollar values for these categories in the preliminary report.
WMG’s reported revenue growth comes in a context where Universal Music Group (UMG) experienced a more modest increase of 6.7% in recorded music subscription streaming revenues during the same period. This disparity may position WMG more favorably within the industry, suggesting a robust growth path for its recorded-rights business.
Further details from the preliminary filing included:
– Recorded music revenue rose to approximately $1.488 billion, up from $1.354 billion in the prior-year period.
– Music Publishing revenue at Warner Chappell Music was estimated at $377 million, compared to $336 million in the previous year.
– Digital revenue for the consolidated group was estimated at approximately $1.251 billion, up from $1.132 billion YoY.
– Music Publishing digital revenue increased by 15% YoY to approximately $235 million.
WMG also reported a significant increase in its operating income, which was estimated at approximately $305 million, up 80% from $169 million in the prior-year quarter. Adjusted OIBDA (Operating Income Before Depreciation and Amortization) also saw a 15% YoY increase at constant currency, estimated at approximately $433 million, up from $373 million.
The company’s net income attributable to WMG was reported at approximately $204 million, a stark contrast to a loss of $16 million in the previous year. The adjusted OIBDA margin rose to 23.2%, compared to 22.1% in the previous year.
WMG reiterated its financial targets, aiming for high-single-digit consolidated revenue growth, double-digit adjustments for OIBDA and earnings per share (EPS), and a 50-60% operating cash flow conversion rate. The company also anticipates an increase in the adjusted OIBDA margin at the high end of its target range over the twelve months ending September 30, 2026.
This preliminary report follows a strong Q1 performance for WMG, where total revenue reached $1.73 billion, marking a 12.1% YoY increase, with recorded music subscription streaming revenues up by 12.7% YoY.
Zerza had joined WMG in May 2025 from Activision Blizzard and had recently been given additional responsibilities as COO. His departure and the company’s swift response with positive financial updates demonstrate WMG’s commitment to maintaining investor confidence and signaling a stable business outlook.
All figures presented in WMG’s filings are preliminary and unaudited, indicating they may be subject to change as the company finalizes its financial closing procedures.
In summary, despite the unexpected departure of its CFO, WMG has managed to present a strong financial performance, which could bolster investor confidence and signal continued growth within the company.
