Universal Music Group Posts $3.78 Billion in Revenue For Q3, Signals Fight Against AI Slop

Universal Music Group posted 3.394 billion euros (about $3.78 billion) in revenue in its third quarter, the world’s largest record company said in its quarterly earnings report published Thursday, a nearly 12 percent increase from 2025.

Recorded revenue grew just over 7 percent excluding revenue from its acquisition of Downtown Music and nearly 15 percent overall, up to 2.55 billion euros or $2.84 billion. Music publishing revenue grew 7.5 percent, or about 1.5 percent when excluding the Downtown revenue, up to 590 million euros or about $659 million. On the company’s earnings call Thursday, Chairman and CEO Lucian Grainge called the Downtown acquisition “the most important acquisition UMG has made since EMI.”

UMG cited releases from Mrs. Green Apple, Olivia Rodrigo, Stray Kids, Ariana Grande and The Beatles as among the biggest performers this quarter. Subscription revenue grew to about $2 billion, an 18 percent jump from last year, with an eight percent growth when excluding downtown. Physical revenue jumped 15 percent at 392 million euros, or about $437 million.

“Our results show the enduring value of backing extraordinary artists, bold ideas, and the teams and technology that help bring their work to the world,” Grainge said in a statement. “The industry is healthy and growing, and we will keep evolving from a position of strength. We are investing in human artistry, improving the economics of streaming, and expanding what’s possible for artists and fans. To support that strategy, we are making UMG faster and more focused so we can operate more efficiently and drive sustained growth and long-term value.”

Merchandise revenue fell about 4.6 percent this quarter, attributable to fewer major tours, coming in at 248 million euros, or about $277 million.

UMG’s earnings report comes two weeks after the company underwent a notable round of layoffs that also include notable executive departures including Def Jam CEO Tunji Balogun and Republic Records chief Jim Roppo, as well as several executives at Interscope.

During the earnings call, Grainge spent much of his opening comments discussing AI and the efforts UMG and other industry stakeholders including streaming platforms have taken thus far to combat the proliferation of AI slop. Grainge had said that the “scale of the problem outpaces the progress,” giving an example of the blues charts “being polluted with AI content that synthetically imitates that emotional impact.”

“AI slop degrades the fan experience and diverts value from real artists. It serves no one. Not artists, platforms or consumers,” Grainge said.

He advocated for AI slop to be paid out less than music from actual musicians to disincentivize “industrial scale content production.”