Warner Music Group reported quarterly revenue edged nearly 1% lower and net income was down almost 63% for the start of the year, as the label home of stars like Bruno Mars and Ed Sheeran struggled with tough comparisons to last year’s quarter.

WMG reported overall revenue of $1.48 billion and recorded music revenue of $1.175 billion, a 1% decline, for the fiscal second quarter, which ended March 31, compared to a year ago. Publishing revenue rose 1% to $310 million. Net income of $36 million compared to $96 million a year ago was hit by a $34-million loss from exchange rates driving up the carrying costs of WMG’s euro-denominated debt and an $11 million increase in a certain kind of taxes.

Total digital revenue slipped 1% with streaming revenue roughly flat, reflecting the comparison to last year’s boon quarter, plus a lighter release slate and market share loss in China.

WMG’s share price fell about 9% on the news, as of 10:30 a.m. New York trading time. WMG CEO Robert Kyncl said the company’s strategy of increasing its market share by reinvesting savings from cost cuts into supporting artist development while also growing the overall income WMG earns from digital service provider partners, like Spotify, is “starting to bear fruit.” But he acknowledged the company — and industry — is mid-transition.

“The reason we’re excited, and we believe all investors should be excited, is our strategy,” Kyncl said Thursday on a call with analysts, pointing to a 50% increase in WMG artists landing on Spotify’s Global charts since mid-2023. “Our investments into artists, songwriters, as well as into our superstars, is yielding hits, and … it’s starting to translate into new release market share in the U.S.”

Songs performed by WMG artists like Mars, Benson Boone and Teddy Swims currently claim half of the spots atop Billboard’s Global 200 chart.

Earlier this week, WMG launched a bespoke platform called Pulse that provides artists and songwriters data about their albums, streams, audiences and money — “the result of a lot of infrastructure work [and investment] … into our digital supply chain,” Kyncl said.

While Kyncl cautioned investors to expect similar trends around streaming subscription revenue for the rest of the year, he highlighted that WMG’s new head of Asia operations joins the company this summer.

Adjusted operating income before depreciation and amortization (OIBDA) declined 3% to $303 million, and adjusted OIBDA margin decreased half a percentage point to 20.4%.

Because it earns more than half of its income from outside of the United States, WMG releases earnings on constant currency basis — a method that updates last year’s revenue and other line items using this year’s foreign exchange rates.

On a constant currency basis, overall quarterly revenue rose 1% — though recorded music and publishing both still declined by 2% and 5% respectively — and adjusted OIBDA declined by 1%.

Key WMG Financial Highlights for its Q2: