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UPDATED: While year-over-year growth in the wake of a global pandemic is an unprecedented metric for the music industry, Universal Music Group posted a robust first quarter for 2022, with revenue up 21.6% (16.5% in constant currency) to €2.199 billion ($2.31 billion). Many of these boosts are at least partially a result of the gradual reopening of the world’s economy after the lockdown of the pandemic.

Music publishing revenue was up 32.5%, recorded-music revenue up 11.3% and merchandising and other revenue up a whopping 69.8% year-over-year in constant currency.

The company’s adjusted EBITDA increased 14.0% year-over-year in constant currency.

Recorded Music revenues for the first quarter of 2022 were €1,721 million, up 16.0% compared to the fourth quarter of 2021, or 11.3% in constant currency. Subscription and streaming revenue grew 19.9% year-over-year, or 14.6% in constant currency, with subscription revenue up 18.3% year-over-year, or 13.4% in constant currency, and ad-supported streaming revenue up 25.1% year-over-year, or 18.4% in constant currency.  Physical revenue showed another quarter of strong growth, increasing by 11.3% year-over-year, or 8.7% in constant currency, on improvements in both CD and vinyl sales, led by King & Prince, Fujii Kaze, Ado, Stromae and Taylor Swift.

Downloads and other digital revenue were down 16.0% year-over-year, or down 20.0% in constant currency, as download sales continue their industry-wide decline. License and other revenue improved 14.4% year-over-year, or 10.1% in constant currency, as a result of improvements in synchronization revenue.

Top sellers for the quarter included releases from Disney’s “Encanto” soundtrack, King & Prince, the Weeknd, Fujii Kaze and Ado, while top sellers in the prior-year quarter included King & Prince, Morgan Wallen, the Weeknd, Justin Bieber and Ariana Grande. In a Q&A session toward the end of the earnings call, chairman-CEO Lucian Grainge pointed to forthcoming releases from Kendrick Lamar, Post Malone and one containing new tracks from a “a major, major global superstar.”

Music Publishing revenue amounted to €375 million in the first quarter of 2022, up 38.4% year-over-year, or 32.5% in constant currency, although UMG adjusted its accounting policy in relation to certain revenues that are collected through societies; this primarily affected music publishing digital, performance, and mechanical revenue. The unit’s digital revenue grew 51.6% year-over-year, or 44.7% in constant currency, reflecting the continued growth of streaming and subscription, as well as the change in accounting.  Performance revenue grew 19.7% year-over-year, or 16.7% in constant currency, reflecting the change in accounting.  Synchronisation revenue grew 34.8% year-over-year, or 29.2% in constant currency, as a result of increased income from advertising and film.  Mechanical revenue grew 27.8% year-over-year, or 21.1% in constant currency, driven by the recent rebound in industry-wide physical sales, as well as the change in accounting.

Merchandising and other revenue grew to €107 million, up 81.4% year-over-year, or 69.8% in constant currency, as touring-related merchandising revenue rebounded following a COVID related slow-down in live touring, according to the announcement.

UMG chairman-CEO Lucian Grainge praised the company’s performance during his comments on the earnings call, pointing to the company’s 26 Grammys across multiple genres and its international growth, specifically in India, China, Korea, Japan and via its Virgin label services division with its deals with Juan Gabriel’s estate and Australia’s Mushroom label. He then focused on the company’s “expanded portfolios” with artists, spanning recorded music, publishing, merchandise and video, particularly Drake and the Weeknd. He also singled out the company’s emphasis on artist development and promotion, singling out Glass Animals’ smash “Heatwaves,” which took 59 weeks to reach No. 1 on the Billboard Hot 100.

In the Q&A session, Grainge, CFO Boyd Muir and EVP Michael Nash fielded multiple questions from media and investors. In response to a question about Netflix’s recent challenges, they stressed the vast differences between video and audio streaming — “You can play Billie Eilish 50 times in 48 hours, but you can’t watch a television program 50 times in 48 hours,” Grainge said — the differences in the nature of their deals with the Weeknd and Elvis Presley’s estate — “The only thing they have in common is that they’re famous,” he said. Grainge also pointed to YouTube Music as a robust new streaming service and said he hopes that TikTok will be a stronger platform for music monetization in the future, and Muir singled out the company’s strong sales in the physical category, with Taylor Swift’s recent vinyl releases in particular.

According to the announcement, EBITDA for the quarter grew 14.9% year-over-year, or 14.1% in constant currency, to €454 million, driven by revenue growth. EBITDA margin was 20.6%, compared to 21.8% in the first quarter of 2021. EBITDA and EBITDA margin were impacted by €1 million of non-cash share-based compensation during both the first quarter of 2022 and the first quarter of 2021.  Excluding these items, Adjusted EBITDA for the quarter was €455 million, up 14.9% year-over-year, or 14.0% in constant currency, driven by revenue growth.  Adjusted EBITDA margin was 20.7%, compared to 21.9% in the first quarter of 2021.

In remarks included with the earnings results, Grainge said, “As important as the positive performance of the business this quarter is its breadth and strength. Our strategic portfolio approach–creatively, geographically, technologically, and across a broad range of artists, partners, formats, businesses and revenue streams–not only deliver results now but, over the long run, we believe will produce an even better and more stable performance while delivering incredible value to our artists and shareholders.”

Muir added, “With this quarter’s results, we continue to deliver on our commitment of long-term growth throughout the company’s major business units and across its multiple and growing revenue streams, including ad-supported streaming, subscription, physical, licensing, music publishing, and merchandising, among others,” said  for UMG. “We remain enthusiastic about the diversified revenue growth that our strategy is producing.”