Universal Music Group (UMG) posted double-digit revenue growth for the second quarter of 2026, but its share price tumbled 25% after the company disclosed that organic subscription growth had slowed more than expected.
Revenue Highlights
- Total revenue: €3.29 billion, up 13.3% year-on-year at constant currency (YoY cc).
- Recorded music revenue: €2.52 billion, up 16.2% YoY cc.
- Subscription and streaming revenue: €1.76 billion, up 15.4% YoY cc.
- Publishing revenue: €616 million, up 9.8% YoY cc.
- Physical, license, performance, and mechanical revenues also increased.
UMG also introduced a 72-hour premium window for new releases in India and sold a large tranche of Spotify stock for $460 million during the quarter.
“This quarter demonstrated both the strong fundamentals of our business and the opportunities we see to improve,” said Matt Ellis, UMG’s CFO.
Subscription Growth and Market Reaction
Despite the headline figures, UMG’s share price fell to €14.61, its lowest since listing. The decline followed the disclosure that subscription revenue growth, excluding the contribution from Downtown Music Holdings, slowed to 6.7% from 7.9% in Q1, missing industry forecasts of 9.3%.
The results highlighted the impact of the Downtown acquisition on reported subscription growth, prompting some shareholders to sell. Former UMG SVP of new digital business Tuhin Roy, now a vocal critic of CEO Sir Lucian Grainge, was among those questioning the company’s performance.
In June, hedge fund Pershing Square made an unsuccessful $64 billion bid for UMG, arguing the stock was undervalued. UMG successfully argued the offer undervalued the business.
The slowdown in organic subscription growth is expected to draw close investor scrutiny in the coming months, with implications for other major labels, digital service providers, and the paid streaming model.
