Universal Music Group head Lucian Grainge. Photo Credit: UMG
Universal Music Group (UMG) has reported mixed financials for Q1 2026, including flat overall revenue and modest across-the-board streaming growth. Meanwhile, with a Pershing Square takeover attempt looming large, the major has confirmed plans to sell Spotify stock and supersize its share-buyback program.
UMG unveiled its Q1 2026 results – providing a noticeably more detailed breakdown than in quarters past – today. And as many will recognize, the comparative transparency didn’t come out of left field.
Earlier in April, when pitching the mentioned takeover proposal, Pershing’s Bill Ackman said he’d heard “from shareholders that they just find the business [UMG] hard to understand.” Furthermore, “[t]hey’re surprised almost every quarter with puts and takes in the earnings,” per Ackman.
Consequently, while Universal Music head Lucian Grainge began his company’s first-quarter conference call by underscoring that “we will not be discussing…the proposal from Pershing Square,” the multibillion-dollar offer undoubtedly factored into the earnings disclosure.
At the top level, this refers to the lenses through which UMG analyzed its revenue: on a straight year-over-year basis, in constant currency (CC), and in constant currency excluding contributions from the newly acquired Downtown.
(Additionally, “in subsequent earnings calls, we’re going to be providing greater insight into the ways we have evaluated investments in our business,” relayed Grainge, who noted that segment EBITDA will be front and center in future reports.)
All told, Universal Music revenue finished at €2.90 billion (currently $3.40 billion) in Q1 2026 – flat YoY, as highlighted, and up 8.1% YoY in CC as well as 4.9% YoY without Downtown, per the report.
As usual, recorded music kicked in the majority of the sum, $2.63 billion/€2.25 billion with Downtown and $2.55 billion/€2.18 billion without (up 0.5% YoY and 5.4% YoY in CC, respectively). Nothing jumps out as especially surprising in this category; amid “a light release schedule,” non-Downtown subscription streaming generated $1.46 billion/€1.25 billion, up 7.9% in CC.
“We had high single-digit or double-digit subscription revenue growth in five of our top-10 markets, including the U.S. and China,” CFO Matt Ellis added during the earnings call.
And with Spotify having already confirmed another ad-supported dip for 2026’s initial three months, UMG pointed to $396 million/€339 million in recorded freemium streaming revenue with Downtown contributions, down 4% YoY, and $382 million/€327 million without, up 1.2% YoY in CC.
Downloads’ long-running descent continued during the quarter, and thanks in part to “particular strength in Japan and the U.S.,” physical including vinyl achieved 3.3% YoY revenue growth (12.7% YoY in CC both with and without Downtown) to $362 million/€310 million.
Rounding out the recorded side, revenue from licensing and other sources slipped 9.8% YoY (5.1% YoY in CC without Downtown) to $312 million/€267 million; “underlying licensing revenue growth from strong synchronization revenue was more than offset by meaningful, non-recurring live income in the first quarter of 2025,” in UMG’s own words.
Shifting to publishing, Universal Music identified so-so results: $629 million/€538 million in overall revenue without Downtown, up 4.3% YoY in CC. Most concerning here is a digital slide, to the tune of €328 million/$383 million with Downtown and $371 million/€317 million without, down 3.2% YoY and up just 1.3% YoY in CC, respectively.
In short, then, UMG’s Q1 2026 showing is nothing to write home about. As we’ve seen industry companies’ shares tumble in the wake of better earnings reports than this, why did UMG stock hold steady during today’s trading?
Universal Music’s newly approved (second) share-buyback program could have something to do with it. As we previously reported, the company’s been repurchasing all manner of shares under a $584 million/€500 million program; now, the board’s agreed to double its size.
This leads to another noteworthy maneuver: With Pershing Square having touched on plans to offload Universal Music’s Spotify stock, the major itself is plowing ahead to cash in on half the equity stake.
Plus, “UMG’s share of the proceeds” – artists are expected to receive payments as well – “will be used initially for its buyback program.” As discussed during the Q&A portion of the earnings call, it would, of course, have made more sense to sell when SPOT was knocking on the door of $800 one year ago.
In any event, the proceeds will still be substantial, and it goes without saying that the sale decision’s timing – UMG held its Spotify stock for nearly two decades before deciding to sell immediately after Pershing proposed doing so – probably isn’t coincidental.
But will all these moves assuage the reported concerns of key investors? Time will tell. More concretely, it’ll be worth closely tracking UMG’s other operational pivots throughout the remainder of 2026 and beyond.
