Universal Music Group Sees Healthy Revenue Gain of 5.3% to $7.2B in First Half of 2026 — Billboard

RESOLVING THE LEDGER

Universal Music Group Sees Healthy Revenue Gain of 5.3% to $7.2B in First Half of 2026 — Billboard | AIPROPX

In the first half of 2026, the Universal Music Group (UMG) continued positive forward momentum with healthy overall revenue growth and managed to maintain internal profitability levels for the period. But overall net profitability was impacted by costs related to consolidating the Downtown acquisition, higher than usual legal fees and financial expenses, and going up against 2025’s first-half profitability, which was boosted by a high-margin settlement.

For the six-month period ended June 30, UMG revenue grew to 6.194 billion euros ($7.195 billion), up 5.3% (10.8% on a constant currency basis) from the prior year’s first half, when the company generated 5.881 billion euros ($6.694 billion). While UMG benefited from the addition of its acquisition of Downtown in the first half of the year to the tune of 234 million euros ($272 million), its revenue was nevertheless up by 1.34% in the second half of 2026 versus the first half of 2025, and 5.7% on a constant currency basis.

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Net profits declined to $223 million euros in the first half of 2026 versus 1.425 billion euros in the corresponding year-earlier period, resulting in a 12-cent euro ($0.14) per diluted share in the first half of 2026 versus a 78-cent euro ($0.88) per diluted share in the corresponding 2025 period.

Nevertheless, UMG generated earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.81 billion euros ($1.37 billion), versus 1.214 billion euros ($1.382 billion) in the year-earlier period.

Within the first half, in the second quarter, UMG generated 3.294 billion euros, a 10.54% increase (13.1% on a constant currency basis) over the year-earlier corresponding period when revenue was 2.98 billion euros. Meanwhile, EBITDA almost held steady, coming in at 610 million euros, versus 611 million euros in 2025’s second quarter. However, adjusted EBITDA grew to 674 million euros versus 676 million euros, which on a constant currency basis was actually a 1.5% increase.

“While I am pleased with our strategic progress and aspects of our financial performance, we know where we can improve,” UMG chairman and CEO Lucian Grainge said in a conference call with analysts. He added that what gives him his “greatest confidence” in the company’s future performance is the broad strength of the UMG organization, and three things that give the company a competitive advantage “that no other company brings together.” He again cited the strength of the core business, pointing out that it has elevated more successful artists than any of its competitors; its leadership at shaping the overall music ecosystem; what he sees as significant opportunities ahead due to the company’s artists and label services, the company’s strength in high-growth market places around the globe; and how both AI (artificial intelligence) and exploiting the super fan contingent will benefit the company and the industry.

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Grainge pointed out that China and India, two of the most populous countries, are among the fastest-growing territories, and says UMG’s experience in the China market will benefit the company as the India marketplace grows. In fact, in India, UMG will duplicate the windowing release strategy it deployed in China so that its new releases first become available on paid streaming services for a 72-hour period before becoming available on ad-supported services.

By division, recorded music grew by 6.83% to 4.769 billion euros ($5.539 billion), up from the prior year first-half revenue total of 4.464 billion euros ($5.081 billion); and music publishing totaled 1.168 billion euros ($1.357 billion),up 3.82% from the corresponding period in 2025 when publishing revenue was 1.125 billion euros ($1.28 billion). Meanwhile, the merch and other revenue category fell to 268 million euros ($311 million) from 311 million euros ($347 million), or a 12.13% decline, due to a softer release schedule and less touring activity.

In addressing the controversial AI issue, which can be a double-edged sword thanks to carrying both beneficial and possible detrimental effects for the industry, Grainge said the business should use it as a benefit — like if a musician adds a new instrument to the mix using the technology — while guarding against allowing it to be regarded as an artist, which would divert royalties from artists, songwriters, labels and publishers. Or as he put it, “AI is a new instrument, and not the next artist.”

In moving over to licensing, Grainge said UMG now has a “streaming 2.0 agreement with almost all of the major streaming services” (a group that includes Spotify, YouTube, Amazon and Deezer), as well as a completed agreement with Pandora and a new strengthened deal with TikTok, according to a transcript of his comments made available to Billboard .

Grainge also pointed out how the company has strengthened its reach in the indie label world since 2013, first by relaunching Caroline, buying out the Ingrooves joint venture and then bringing those two companies together under the new Virgin Music Group banner. With the Downtown acquisition, UMG is now the second largest operator in the indie artist services space.

He further cited UMG artists who helped boost UMG’s performance in the first half, including releases by Sam Fender, Olivia Rodrigo, Noah Kahan, Gracie Abrams, Paul McCartney and The Rolling Stones.

Looking ahead, Grainge says he expects UMG to continue its momentum into the second half thanks to upcoming releases from the likes of Ariana Grande, KATSEYE, Sam Smith and Mrs. GREEN APPLE, among other yet-to-be-announced releases.

Moreover, Grainge noted that in looking at th...