Universal Music Q2 Earnings Highlights: Streaming, Superfans & More

Universal Music Group (UMG) reported strong streaming and publishing growth on Thursday (July 31), with total revenue reaching 2.98 billion euros ($3.38 billion), up 4.5% in constant currency (which excludes losses from foreign currency changes). That was less than half the first quarter’s growth rate of 9.5%, and some parts of UMG’s business — namely physical music and merchandise — didn’t compare well to the prior-year quarter.

Here are some key takeaways from UMG’s second quarter earnings release and a conference call with executives.

Streaming Growth Hit the Target 

Streaming growth is the financial metric that tends to attract the most attention in earnings results, and for good reason. Streaming accounted for about 70% of UMG’s recorded music revenue in the second quarter, and subscription revenue is the single most important determinant of the health of the music business.

UMG’s recorded music division maintained strong subscription growth of 8.5% (in constant currency) in the second quarter, well within its target 8% to 10% range and comparable to the 9.3% growth rate in the first quarter (also in constant currency). The 8.5% growth also compares well to 2024’s quarterly subscription growth rates of, in order, 12.5%, 6.9%, 8.2% and 9.0% (all in constant currency).

It’s important to note that UMG’s subscription results don’t reflect its latest licensing deals with Spotify and Amazon, COO Boyd Muir said during UMG’s earnings call on Thursday (July 31), which allow UMG to influence price increases through its setting of wholesale rates. In the second quarter, growth came mostly from an increase in the number of subscribers, while price increases played a smaller role, according to Muir.

Ad-supported streaming revenue improved 9.1% in constant currency, although as reported (which takes foreign exchange into account), the quarterly numbers haven’t improved much recently. From broadcast radio to satellite radio and streaming, advertising revenues have disappointed in recent quarters. Spotify said as much on Tuesday (July 29): “We’ve simply been moving too slowly,” CEO Daniel Ek said of Spotify’s advertising business during the company’s earnings call.

UMG’s publishing division doesn’t break out subscription revenue, but its digital revenue, which includes all streaming income, jumped 16.2% to 351 million euros ($398 million) and accounted for 62% of total publishing revenue.

Foreign exchange made the numbers look worse

UMG’s total revenue in the second quarter grew 4.5% in constant currency but just 1.6% as reported. Billboard’s article on UMG’s earnings went to lengths to differentiate between “as reported” and “in constant currency” results. That’s because looking only at numbers as reported would give the reader a warped sense of UMG’s performance. By converting results to constant currency, UMG removed the effects of a weakened U.S. dollar.

Thanks to the uncertainties created by President Trump’s tariff policies and Trump’s criticism of the U.S. Federal Reserve, it’s been a rough year for the dollar. In 2025, the euro has lost 9.3% of its value against the dollar and was once down 12.3%. Those changes add nuance to financial results for companies such as UMG, which reports in euros and receives a large portion of its business from the U.S.

Still, while a 4.5% growth rate beats 1.6%, it was less than half the 9.5% growth in the previous quarter and the 9.6% growth in the second quarter of 2024.

Superfan products are delayed, but they’re coming

Labels want to target superfans, but other than Tencent Music Entertainment, streaming services have yet to launch tiers aimed at those high-value customers. Alex Norström, Spotify’s chief business officer, explained the wait on Tuesday when he mentioned the “very high value standards” Spotify has for new products. “We’re making progress for sure, but it’s taking time,” he said.

The topic also came up during UMG’s earnings call, and executives provided a similar message. “Getting the product right is more important to us than launching it too early,” said CEO Lucian Grainge, while Michael Nash, executive vp of digital strategy, said that UMG is “encouraged” by its conversations with streaming services and “deeply engaged with all of our key partners, including Spotify.” But each company is going to move at its own pace. “These partners have product roadmaps and business development requirements around execution, which impact their timing,” Nash added.

Superfan tiers have become a hot topic because they could be a boost for both streaming services and rights holders. UMG’s internal research suggests that 20% of subscribers would upgrade to a superfan tier. And short of constant price increases for all customers, using superfan tiers to generate more revenue from a subset of subscribers is a feasible way to support the revenue growth that companies and investors want to see.

UMG’s Downtown acquisition “will pass” the European Commission review

Grainge sounded confident that UMG’s acquisition of Downtown Music Holdings will receive a green light from European Commission regulators, who are currently reviewing the deal. The way Grainge and UMG see it, UMG’s bid for Downtown is fundamentally different from its 2012 acquisition of EMI Music’s recorded music division, which reduced the number of major label groups from four to three. “Because the combined company will help support the growth and success of independent labels, and there are artists everywhere in what is a very highly competitive artist services space with more than 100 companies, we remain confident that the transaction will pass that review and will be completed before the end of the year,” Grainge said.