Universal Music Group reported higher revenue and earnings for its second quarter on Wednesday amid growth across its businesses, including its recorded music unit, which benefited from releases from the likes of BTS and Olivia Rodrigo.

The music major, led by chairman and CEO Lucian Grainge, was spun off by French telecom and media conglomerate Vivendi, which retained a stake of about 10 percent, last fall.

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Given high inflation and worries about an economic slowdown, management was asked about the macro-economic challenges during the quarterly earnings conference call and whether it plans to take any measures to control costs as a result. “Music has been proven to be extremely resilient in economic downturns,” Grainge replied. “I have been through about four of them.” He added: “This team that we have here (has) managed those headwinds several times in the past. Music is a low-cost form of entertainment with what we consider incredible consumer value, and we are monetizing content from more sources than ever before.” He added that the firm’s executive team across its businesses and regions are “constantly monitoring both our fixed and variable costs” as demonstrated during the COVID-19 pandemic. “Shop keeping is in our blood.”

Its second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA), a key profitability metric, increased 18.7 percent, or 8.8 percent on a constant currency basis, to 507 million euros ($512 million).

Quarterly revenue jumped 25.4 percent to 2.54 billion euros ($2.57 billion), or 17.3 percent when assuming constant currency exchange rates. The company’s recorded music, music publishing and “merchandising and other” segments all contributed to the improvement.

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In UMG’s recorded music unit, quarterly revenue rose 16.2 percent, or 9.0 percent assuming constant currencies, to 1.92 billion euros ($1.94 billion). Subscription and streaming revenue jumped 7.0 percent on a constant currency basis, while physical revenue climbed 17.4 percent on that basis, “mainly driven by strong sales from BTS and King & Prince.” But downloads and other digital revenue dropped 12.4 percent as download sales have declined industrywide.

Top sellers in the latest quarter included BTS, King & Prince, Rammstein, Olivia Rodrigo and INI, the company said, while top sellers in the prior-year quarter included BTS, Justin Bieber, Olivia Rodrigo, The Weeknd and Morgan Wallen

Music publishing revenue amounted to 476 million euros ($481 million) in the second quarter, a gain of 62.5 percent, or 50.6 percent in constant currency terms. Growth drivers were an accounting change, “healthy growth from streaming and subscription, the broadening monetization of music publishing rights, a continued rebound in physical sales, as well as initial contributions from catalogue acquisitions made in prior years,” the company said.  In February, UMG unveiled a deal to acquire Sting’s entire song catalog, which includes such rock classics from The Police frontman as “Roxanne,” “Every Breath You Take” and “Message in a Bottle.” Financial terms were not disclosed.

UMG’s “merchandising and other” revenue saw particular gains in the second quarter, jumping 78.5 percent, or 67.6 percent in constant currency, to 141 million euros ($143 million). “Touring-related merchandising revenue rebounded following a COVID-related slowdown in live touring in the prior-year period,” the company explained.

“Our strong performance across diversified revenue streams is fuelled by the successful partnerships we’ve formed with our artists — both new and established — in markets around the world,” said Grainge. “The widespread growth we are producing throughout UMG demonstrates that our strategy is progressing as planned, underscoring the strength and resilience of our business and our ability to deliver for our artists and our shareholders alike.”

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During the earnings call, he cited Drake, BTS, Rodrigo and Frank Zappa as examples for how UMG has ensured a strong performance “fueled by deep partnerships with artists at all stages of their of their careers.” A slide shown during his comments noted that Zappa has seen “double-digit growth in streams every year” for the last decade with UMG, while Rodrigo has the “21st century’s longest-running debut album in the top 10 on (the) Billboard 200.”

Added executive vp, CFO and president of operations Boyd Muir: “We’re driving incremental revenue and EBITDA through a range of compelling monetization opportunities, which in turn enables us to thoughtfully reinvest in the business’ long-term growth.”

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