Q3 Music Earnings Roundup: Here’s What Every Company Made (Updating)

A rundown of publicly traded companies' results for the quarter ending Sept. 30, from Spotify to Universal Music Group and more. Sales Chart Binoculars Illustration Matthew Billington/WWD The broader economy’s struggles with increasing prices, worsening consumer sentiment and fears of an AI bubble are not far from music industry executives’ minds this quarterly earnings season. Music companies have been cutting expenses, building up their available cash and prioritizing the music fans and audio entertainment subscribers who deliver the most to their bottom line. Spotify — the biggest publicly traded music company, with a $122 billion market cap — showed it has not suffered any loss of subscriber growth momentum, even amid global price increases. But to keep growing, executives said they will continue to enhance the platform’s premium tier with add-on subscription offerings like audiobook subscriptions and new features like Reserved, while also adding value to the free tier. Related Also on the streaming front, Deezer continued letting low-margin legacy partnership deals roll off in the third quarter in favor of higher-value direct relationships with subscribers. That focus, along with attention to costs, has the company looking ahead to a third profitable year. SiriusXM focused on stabilizing self-pay subscriptions (+5,000 net adds) and driving down churn to 1.5%, while Universal Music Group (UMG) honed in on integrating Downtown Music Group and reviving its subscription and streaming revenue. UMG’s efforts paid off, as the company reported that revenue from subscriptions and streaming grew by 8.4% on an organic basis and 17.9% when including Downtown’s contribution. Deezer and SiriusXM raised their full-year profitability guidance, while Spotify delivered record gross margins (33%) and free cash flow generation. UMG does not provide quarterly or annual guidance for its key financial metrics, but its chief digital officer, Michael Nash, said he believes the music industry is on track to hit 1 billion streaming subscribers by 2028 and 1.5 billion subscribers by the middle of the next decade. That volume increase, Nash said, will be the most significant driver of subscription revenue growth for UMG in 2027. Nonetheless, all of these companies are keeping a watchful eye on operating expenses. SiriusXM slashed market spend to make up for revenue stagnation, and UMG recently rolled out another raft of layoffs related to a previously announced cost-cutting plan meant to deliver 250 million euros ($271 million) in annual savings by the end of 2026. Next week, Sony Group, Sphere Entertainment Company, Madison Square Garden Entertainment, Reservoir Media and SM Entertainment report earnings, among others. Here is a roundup of the key takeaways from companies’ earnings so far. We will update this list as more results are reported. Deezer Paris-based Deezer said it’s on track for its third profitable year following third-quarter results that showed its subscriber base in France grew by 6.5%, helping drive subscriber revenues up 6.4% to 94.1 million euros ($108.3 million). The company reported that overall revenue edged 1% higher in constant currency, which neutralizes foreign exchange rate fluctuations, to 133.8 million euros ($153.9 million). Deezer needed that growth in subscribers; outside of France, total direct subscribers grew 4% from a year ago to 5.8 million. Deezer still onboards clients through its streaming service offered on phones by telecom providers like TIM and Orange, but it has wound down some of those business partnerships, resulting in a 17% decline in subscribers in that segment. (Notably, Deezer loses out on some revenue when it onboards subscribers through business partnerships.) Average revenue per user (ARPU) from subscribers gained through partnerships rose by nearly 16.7% to 3.7 euros ($4.26) a month in the prior quarter, though ARPU from direct subscribers held flat at 5.4 euros ($6.21). Read more here. SiriusXM Holdings SiriusXM Holdings stock rose by more than 4% on Thursday (Oct. 29) as investors rejoiced in the 5,000 net new subscribers and stabilization of ad revenue shown in the audio entertainment giant’s third-quarter financial results. Sirius executives said the number of subscribers tuning into its sports stations, which include a growing number of local sports offerings, rose by 4% in the quarter and that they listened 7% longer on average. And while advertising revenue was flat at $465 million, advertising revenue from podcasts rose 20%, helping to offset softness in music ad revenue. SiriusXM raised its full-year forecast for revenue, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) and free cash flow for the second straight quarter, saying it now expects $8.55 billion in revenue, $2.65 billion in EBITDA and $1.4 billion in free cash flow for 2026. For the quarter, Sirius reported revenue of $2.153 billion, down slightly due to lower equipment revenue, while net income was up 6.7% to $317 million, or $0.94 earnings per share. Read more here. Spotify Spotify’s 6 million net new subscribers in the third quarter came in 1 million ahead of guidance and drove the streamer’s stock up 11% on the day following earnings. Total revenue rose 14% in constant currency to 4.97 billion euros ($5.63 billion) from a year ago, helped by a 15% rise in subscription streaming revenue to 4.5 billion euros ($5.08 billion). While monthly active users (MAUS) grew in line with guidance — rising 11% to 788 million users worldwide — Spotify’s execs were pleased with what they described as positive signs of growth from a rebuilt advertising tech stack. Ad-supported revenue rose 9% in constant currency from a year ago to 482 million euros ($546 million). Operating expenses stemming primarily from “temporarily elevated growth in marketing and cloud/AI spend” totaled 967 million euros ($1.1 billion) in the quarter — nearly 20% of Spotify’s overall revenue. Read more here. Universal Music Group Universal Music Group (UMG) reported revenue growth of 11.7% to 3.39 billion euros ($3.87 billion), or 5.3% without Downtown. The quarter benefited from 1.81 billion euros ($2.063 billion) in subscription streaming revenue, an increase of 17.9%, of which Downtown contributed 9.5%. While those percentages exaggerate Downtown’s financial contribution to some extent because of the newness of the acquisition — Downtown contributed 195 million euros ($222.3 million) to UMG’s overall revenue — UMG’s executives reiterated that Downtown is the most important acquisition UMG has made in a decade. “The numbers are already proving why we made this deal,” UMG CEO Lucian Grainge said on a call discussing the results. Read more here. Daily newsletters straight to your inbox Sign Up More From Pro