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Includes depreciation expense of $(29) and $(26) for the three months ended December 31, 2024 and December 31, 2023, respectively.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-32502

Warner Music Group Corp. (Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) |  | 13-4271875 (I.R.S. Employer Identification No.)
| 1633 Broadway New York, NY 10019 (Address of principal executive offices) (212) 275-2000 (Registrant’s telephone number, including area code) |

___________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Class A Common Stock, $0.001 par value per share |  | WMG |  | The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ |  | Accelerated filer | ☐
Non-accelerated filer | ☐ |  | Smaller reporting company | ☐
Emerging growth company | ☐ |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒
As of August 4, 2025, there were 145,886,566 shares of Class A Common Stock and 375,380,313 shares of Class B Common Stock of the registrant outstanding.

WARNER MUSIC GROUP CORP.
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2025
TABLE OF CONTENTS

|  | Page Number
Part I. | Financial Information |
Item 1. | Financial Statements (Unaudited) | 1
| Condensed Consolidated Balance Sheets as of June 3 0, 2025 and September 30, 2024 | 1
| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 3 0, 2025 and June 3 0, 2024 | 2
| Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 3 0, 2025 and June 3 0, 2024 | 3
| Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended June 3 0, 2025 and June 3 0, 2024 | 4
| Condensed Consolidated Statements of Equity for the Three and Nine Months Ended June 3 0, 2025 and June 3 0, 2024 | 5
| Notes to Condensed Consolidated Financial Statements | 7
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 54
Item 4. | Controls and Procedures | 55
Part II. | Other Information |
Item 1. | Legal Proceedings | 57
Item 1A. | Risk Factors | 57
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 57
Item 3. | Defaults Upon Senior Securities | 57
Item 4. | Mine Safety Disclosures | 57
Item 5. | Other Information | 57
Item 6. | Exhibits | 59
Signatures | 60

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Warner Music Group Corp.
Condensed Consolidated Balance Sheets
(In millions, except share amounts which are reflected in thousands)
(Unaudited)

| June 30, 2025 |  | September 30, 2024
Assets |  |  |
Current assets: |  |  |
Cash and equivalents | $ | 527 |  |  | $ | 694 |
Accounts receivable, net of allowances of $24 million and $26 million | 1,305 |  |  | 1,255 |
Inventories | 101 |  |  | 99 |
Royalty advances expected to be recouped within one year | 579 |  |  | 470 |
Prepaid and other current assets | 166 |  |  | 125 |
Total current assets | 2,678 |  |  | 2,643 |
Royalty advances expected to be recouped after one year | 1,075 |  |  | 874 |
Property, plant and equipment, net of accumulated depreciation of $701 million and $615 million | 472 |  |  | 481 |
Operating lease right-of-use assets, net | 216 |  |  | 225 |
Goodwill | 2,064 |  |  | 2,021 |
Intangible assets subject to amortization, net | 2,764 |  |  | 2,359 |
Intangible assets not subject to amortization | 154 |  |  | 152 |
Deferred tax assets, net | 46 |  |  | 52 |
Other assets | 308 |  |  | 348 |
Total assets | $ | 9,777 |  |  | $ | 9,155 |
Liabilities and Equity |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 241 |  |  | $ | 289 |
Accrued royalties | 2,828 |  |  | 2,549 |
Accrued liabilities | 533 |  |  | 641 |
Accrued interest | 39 |  |  | 17 |
Operating lease liabilities, current | 43 |  |  | 45 |
Deferred revenue | 278 |  |  | 246 |
Other current liabilities | 88 |  |  | 110 |
Total current liabilities | 4,050 |  |  | 3,897 |
Acquisition Corp. long-term debt | 4,061 |  |  | 4,014 |
Asset-based long-term debt | 302 |  |  | — |
Operating lease liabilities, noncurrent | 212 |  |  | 228 |
Deferred tax liabilities, net | 204 |  |  | 195 |
Other noncurrent liabilities | 136 |  |  | 146 |
Total liabilities | $ | 8,965 |  |  | $ | 8,480 |
Equity: |  |  |
Class A common stock, $0.001 par value; 1,000,000 shares authorized, 145,887 and 142,559 shares issued and outstanding as of June 30, 2025 and September 30, 2024, respectively | $ | — |  |  | $ | — |
Class B common stock, $0.001 par value; 1,000,000 shares authorized, 375,380 issued and outstanding as of June 30, 2025 and September 30, 2024, respectively | 1 |  |  | 1 |
Additional paid-in capital | 2,102 |  |  | 2,077 |
Accumulated deficit | (1,340) |  |  | (1,313) |
Accumulated other comprehensive loss, net | (174) |  |  | (247) |
Total Warner Music Group Corp. equity | 589 |  |  | 518 |
Noncontrolling interest | 223 |  |  | 157 |
Total equity | 812 |  |  | 675 |
Total liabilities and equity | $ | 9,777 |  |  | $ | 9,155 |

See accompanying notes
1

Warner Music Group Corp.
Condensed Consolidated Statements of Operations
(In millions, except share amounts which are reflected in thousands, and per share data)
(Unaudited)

| Three Months Ended June 30, |  | Nine Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenue | $ | 1,689 |  |  | $ | 1,554 |  |  | $ | 4,839 |  |  | $ | 4,796 |
Costs and expenses: |  |  |  |  |  |  |
Cost of revenue | (913) |  |  | (830) |  |  | (2,598) |  |  | (2,501) |
Selling, general and administrative expenses (a) | (471) |  |  | (462) |  |  | (1,395) |  |  | (1,384) |
Restructuring and impairments | (69) |  |  | (1) |  |  | (109) |  |  | (96) |
Amortization expense | (67) |  |  | (55) |  |  | (186) |  |  | (167) |
Total costs and expenses | (1,520) |  |  | (1,348) |  |  | (4,288) |  |  | (4,148) |
Net gain on divestitures | — |  |  | 1 |  |  | — |  |  | 32 |
Operating income | 169 |  |  | 207 |  |  | 551 |  |  | 680 |
Interest expense, net | (43) |  |  | (40) |  |  | (119) |  |  | (121) |
Other (expense) income | (137) |  |  | 4 |  |  | (48) |  |  | (9) |
(Loss) income before income taxes | (11) |  |  | 171 |  |  | 384 |  |  | 550 |
Income tax expense | (5) |  |  | (30) |  |  | (123) |  |  | (120) |
Net (loss) income | (16) |  |  | 141 |  |  | 261 |  |  | 430 |
Less: Income attributable to noncontrolling interest | — |  |  | (2) |  |  | (5) |  |  | (36) |
Net (loss) income attributable to Warner Music Group Corp. | $ | (16) |  |  | $ | 139 |  |  | $ | 256 |  |  | $ | 394 |
Net income (loss) per share attributable to common stockholders: |  |  |  |  |  |  |
Class A – Basic and Diluted | $ | (0.03) |  |  | $ | 0.27 |  |  | $ | 0.49 |  |  | $ | 0.75 |
Class B – Basic and Diluted | $ | (0.03) |  |  | $ | 0.27 |  |  | $ | 0.49 |  |  | $ | 0.75 |
Weighted average common shares: |  |  |  |  |  |  |
Class A – Basic and Diluted | 145,878 |  | 141,568 |  | 144,623 |  | 140,531
Class B – Basic and Diluted | 375,380 |  | 376,315 |  | 375,380 |  | 376,868
(a) Includes depreciation expense: | $ | (29) |  |  | $ | (25) |  |  | $ | (86) |  |  | $ | (77) |

See accompanying notes
2

Warner Music Group Corp.
Condensed Consolidated Statements of Comprehensive Income
(In millions)
(Unaudited)

| Three Months Ended June 30, |  | Nine Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Net (loss) income | $ | (16) |  |  | $ | 141 |  |  | $ | 261 |  |  | $ | 430 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |
Foreign currency adjustment | 118 |  |  | (10) |  |  | 73 |  |  | 13 |
Deferred loss on derivative financial instruments | — |  |  | — |  |  | — |  |  | (1) |
Minimum pension liability | — |  |  | — |  |  | — |  |  | (1) |
Other comprehensive income (loss), net of tax | 118 |  |  | (10) |  |  | 73 |  |  | 11 |
Total comprehensive income | 102 |  |  | 131 |  |  | 334 |  |  | 441 |
Less: Income attributable to noncontrolling interest | — |  |  | (2) |  |  | (5) |  |  | (36) |
Comprehensive income attributable to Warner Music Group Corp. | $ | 102 |  |  | $ | 129 |  |  | $ | 329 |  |  | $ | 405 |

See accompanying notes
3

Warner Music Group Corp.
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)

| Nine Months Ended June 30,
| 2025 |  | 2024
Cash flows from operating activities |  |  |
Net income | $ | 261 |  |  | $ | 430 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 272 |  |  | 244 |
Unrealized losses and remeasurement of foreign-denominated loans and foreign currency forward exchange contracts | 84 |  |  | 10 |
Deferred income taxes | 7 |  |  | 29 |
Net gain on investments | (27) |  |  | (4) |
Net gain on divestitures | — |  |  | (32) |
Non-cash interest expense | 4 |  |  | 5 |
Non-cash stock-based compensation expense | 43 |  |  | 28 |
Non-cash impairments | 102 |  |  | 50 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable, net | (21) |  |  | (95) |
Inventories | — |  |  | 34 |
Royalty advances | (295) |  |  | (183) |
Other noncurrent assets | — |  |  | (85) |
Accounts payable and accrued liabilities | (191) |  |  | (119) |
Royalty payables | 246 |  |  | 352 |
Accrued interest | 15 |  |  | 8 |
Operating lease liabilities | (12) |  |  | (4) |
Deferred revenue | 24 |  |  | (205) |
Other balance sheet changes, net | (65) |  |  | (13) |
Net cash provided by operating activities | 447 |  |  | 450 |
Cash flows from investing activities |  |  |
Acquisition of music publishing rights and music catalogs | (152) |  |  | (123) |
Capital expenditures | (111) |  |  | (83) |
Investments and acquisitions of businesses, net of cash received | (46) |  |  | (26) |
Proceeds from the sale of investments | 36 |  |  | 12 |
Proceeds from divestitures | — |  |  | 19 |
Net cash used in investing activities | (273) |  |  | (201) |
Cash flows from financing activities |  |  |
Partial proceeds from Senior Term Loan Facility refinancing | — |  |  | 42 |
Partial repayment of Senior Term Loan Facility refinancing | — |  |  | (42) |
Deferred financing costs paid | — |  |  | (2) |
Repayment of Term Loan Mortgage | (1) |  |  | — |
Distribution to noncontrolling interest holders | (8) |  |  | (6) |
Dividends paid | (283) |  |  | (267) |
Payment of deferred consideration | (23) |  |  | — |
Taxes paid related to net share settlement of restricted stock units and common stock | (19) |  |  | (5) |
Common stock repurchased and retired | (3) |  |  | — |
Other financing activity | (7) |  |  | — |
Net cash used in financing activities | (344) |  |  | (280) |
Effect of exchange rate changes on cash and equivalents | 3 |  |  | (3) |
Net decrease in cash and equivalents | (167) |  |  | (34) |
Cash and equivalents at beginning of period | 694 |  |  | 641 |
Cash and equivalents at end of period | $ | 527 |  |  | $ | 607 |

See accompanying notes
4

Warner Music Group Corp.
Condensed Consolidated Statements of Equity
(In millions, except share amounts which are reflected in thousands, and per share data)
(Unaudited)

Nine Months Ended June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Class A Common Stock |  | Class B Common Stock |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Loss |  | Total Warner Music Group Corp. Equity |  | Non-controlling Interest |  | Total Equity
| Shares |  | Value |  | Shares |  | Value |
Balance at September 30, 2024 | 142,559 |  |  | $ | — |  |  | 375,380 |  |  | $ | 1 |  |  | $ | 2,077 |  |  | $ | (1,313) |  |  | $ | (247) |  |  | $ | 518 |  |  | $ | 157 |  |  | $ | 675 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 256 |  |  | — |  |  | 256 |  |  | 5 |  |  | 261 |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 73 |  |  | 73 |  |  | — |  |  | 73 |
Dividends ($0.54 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (283) |  |  | — |  |  | (283) |  |  | — |  |  | (283) |
Stock-based compensation expense | — |  |  | — |  |  | — |  |  | — |  |  | 49 |  |  | — |  |  | — |  |  | 49 |  |  | — |  |  | 49 |
Distribution to noncontrolling interest holders | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8) |  |  | (8) |
Acquisition of noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 74 |  |  | 74 |
Vesting of restricted stock units, net of shares withheld for employee taxes | 801 |  |  | — |  |  | — |  |  | — |  |  | (19) |  |  | — |  |  | — |  |  | (19) |  |  | — |  |  | (19) |
Shares issued under the Plan | 2,607 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Common shares repurchased and retired | (80) |  |  | — |  |  | — |  |  | — |  |  | (3) |  |  | — |  |  | — |  |  | (3) |  |  | — |  |  | (3) |
Other | — |  |  | — |  |  | — |  |  | — |  |  | (2) |  |  | — |  |  | — |  |  | (2) |  |  | (5) |  |  | (7) |
Balance at June 30, 2025 | 145,887 |  |  | $ | — |  |  | 375,380 |  |  | $ | 1 |  |  | $ | 2,102 |  |  | $ | (1,340) |  |  | $ | (174) |  |  | $ | 589 |  |  | $ | 223 |  |  | $ | 812 |

Three Months Ended June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Class A Common Stock |  | Class B Common Stock |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Loss |  | Total Warner Music Group Corp. Equity |  | Non-controlling Interest |  | Total Equity
| Shares |  | Value |  | Shares |  | Value |
Balance at March 31, 2025 | 145,032 |  |  | $ | — |  |  | 375,380 |  |  | $ | 1 |  |  | $ | 2,088 |  |  | $ | (1,230) |  |  | $ | (292) |  |  | $ | 567 |  |  | $ | 223 |  |  | $ | 790 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (16) |  |  | — |  |  | (16) |  |  | — |  |  | (16) |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 118 |  |  | 118 |  |  | — |  |  | 118 |
Dividends ($0.18 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (94) |  |  | — |  |  | (94) |  |  | — |  |  | (94) |
Stock-based compensation expense | — |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  | — |  |  | — |  |  | 15 |  |  | — |  |  | 15 |
Vesting of restricted stock units, net of shares withheld for employee taxes | 6 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Shares issued under the Plan | 869 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Common shares repurchased and retired | (20) |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | (1) |
Balance at June 30, 2025 | 145,887 |  |  | $ | — |  |  | 375,380 |  |  | $ | 1 |  |  | $ | 2,102 |  |  | $ | (1,340) |  |  | $ | (174) |  |  | $ | 589 |  |  | $ | 223 |  |  | $ | 812 |

5

Nine Months Ended June 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Class A Common Stock |  | Class B Common Stock |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Loss |  | Total Warner Music Group Corp. Equity (Deficit) |  | Non-controlling Interest |  | Total Equity (Deficit)
| Shares |  | Value |  | Shares |  | Value |
Balance at September 30, 2023 | 138,345 |  |  | $ | — |  |  | 377,650 |  |  | $ | 1 |  |  | $ | 2,015 |  |  | $ | (1,387) |  |  | $ | (322) |  |  | $ | 307 |  |  | $ | 123 |  |  | $ | 430 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 394 |  |  | — |  |  | 394 |  |  | 36 |  |  | 430 |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |  |  | — |  |  | 11 |
Dividends ($0.51 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (267) |  |  | — |  |  | (267) |  |  | — |  |  | (267) |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 43 |  |  | — |  |  | — |  |  | 43 |  |  | — |  |  | 43 |
Distribution to noncontrolling interest holders | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (6) |  |  | (6) |
Acquisition of noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | (1) |
Shares issued under the Plan | 1,738 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Exchange of Class B shares for Class A shares | 1,335 |  |  | — |  |  | (1,335) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Shares issued under Omnibus Incentive Plan | 185 |  |  | — |  |  | — |  |  | — |  |  | (5) |  |  | — |  |  | — |  |  | (5) |  |  | — |  |  | (5) |
Balance at June 30, 2024 | 141,603 |  |  | $ | — |  |  | 376,315 |  |  | $ | 1 |  |  | $ | 2,053 |  |  | $ | (1,260) |  |  | $ | (311) |  |  | $ | 483 |  |  | $ | 152 |  |  | $ | 635 |

Three Months Ended June 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Class A Common Stock |  | Class B Common Stock |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Loss |  | Total Warner Music Group Corp. Equity |  | Non-controlling Interest |  | Total Equity
| Shares |  | Value |  | Shares |  | Value |
Balance at March 31, 2024 | 141,596 |  |  | $ | — |  |  | 376,315 |  |  | $ | 1 |  |  | $ | 2,043 |  |  | $ | (1,310) |  |  | $ | (301) |  |  | $ | 433 |  |  | $ | 152 |  |  | $ | 585 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 139 |  |  | — |  |  | 139 |  |  | 2 |  |  | 141 |
Other comprehensive loss, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10) |  |  | (10) |  |  | — |  |  | (10) |
Dividends ($0.17 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (89) |  |  | — |  |  | (89) |  |  | — |  |  | (89) |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Distribution to noncontrolling interest holders | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | (1) |
Acquisition of noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | (1) |
Shares issued under Omnibus Incentive Plan | 7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Balance at June 30, 2024 | 141,603 |  |  | $ | — |  |  | 376,315 |  |  | $ | 1 |  |  | $ | 2,053 |  |  | $ | (1,260) |  |  | $ | (311) |  |  | $ | 483 |  |  | $ | 152 |  |  | $ | 635 |

See accompanying notes
6

Warner Music Group Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Description of Business
Warner Music Group Corp. (the “Company”) was formed on November 21, 2003. The Company is the direct parent of WMG Holdings Corp. (“Holdings”), which is the direct parent of WMG Acquisition Corp. (“Acquisition Corp.”). Acquisition Corp. is one of the world’s major music entertainment companies. We classify our business interests into two fundamental operations: Recorded Music and Music Publishing.
Recorded Music Operations
Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists. We play an integral role in virtually all aspects of the recorded music value chain from discovering and developing talent to producing, distributing and selling music to marketing and promoting recording artists and their music.
Music Publishing Operations
While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders.
2. Summary of Significant Accounting Policies
Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.
The consolidated balance sheet at September 30, 2024 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S. GAAP for complete financial statements.
For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (File No. 001-32502).
Basis of Consolidation
The accompanying financial statements present the consolidated accounts of all entities in which the Company has a controlling voting interest and/or variable interest required to be consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated.
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC 810”) requires the Company first evaluate its investments to determine if any investments qualify as a variable interest entity (“VIE”). A VIE is consolidated if the Company is deemed to be the primary beneficiary of the VIE, which is the party involved with the VIE that has both (i) the power to control the most significant activities of the VIE and (ii) either the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. If an entity is not deemed to be a VIE, the Company consolidates the entity if the Company has a controlling voting interest. As of June 30, 2025 and September 30, 2024, there were approximately $68 million and $77 million of assets, respectively, related to VIEs included in our condensed consolidated balance sheets. As of June 30, 2025 and September 30, 2024, there were approximately $2 million of liabilities related to VIEs included in our condensed consolidated balance sheets.
The Company has performed a review of all subsequent events through the date the financial statements were issued and has determined that no additional disclosures are necessary.
7

Income Taxes
The Company uses the estimated annual effective tax rate method in computing its interim tax provision. Certain items, including those deemed to be unusual and infrequent are excluded from the estimated annual effective tax rate. In such cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions, and are recorded in the period in which the change occurs.
Global Intangible Low-Taxed Income (“GILTI”) imposes U.S. taxes on the excess of a deemed return on tangible assets of certain foreign subsidiaries. The Company made an election to recognize GILTI tax in the specific period in which it occurs.
New Accounting Pronouncements
Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendment enhances reportable segment disclosure requirements, primarily by requiring enhanced disclosures about significant segment expenses, reporting for interim periods, and Chief Operating Decision Maker related information. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendment enhances income tax disclosure requirements, by requiring enhanced disclosures on the income tax rate reconciliation and income taxes paid. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendment requires new financial statement disclosures to provide disaggregated information for certain types of expenses, including purchases of inventory, employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of revenue and selling, general and administrative expenses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements.
3. Earnings per Share
The Company utilizes the two-class method to report earnings per share. Basic earnings per share is computed by dividing net income available to each class of stock, less earnings available to participating securities, divided by the weighted average number of outstanding common shares for each class of stock. Diluted earnings per share is computed by dividing net income available to each class of stock, less earnings available to participating securities, divided by the weighted average number of outstanding common shares, plus dilutive potential common shares, which is calculated using the treasury-stock method. The potentially dilutive common shares did not have a dilutive effect on the Company’s EPS calculation for the three and nine months ended June 30, 2025 and 2024.
The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three and nine months ended June 30, 2025 and 2024 (in millions, except share amounts, which are reflected in thousands, and per share data):
8

| Three Months Ended June 30, |  |
| 2025 |  | 2024 |  |  |  |
| Class A |  | Class B |  | Class A |  | Class B |  |  |  |  |  |  |  |
Basic and Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to Warner Music Group Corp. | $ | (4) |  |  | $ | (12) |  |  | $ | 39 |  |  | $ | 100 |  |  |  |  |  |  |  |  |
Less: Net loss attributable to participating securities (a) | — |  |  | — |  |  | (2) |  |  | — |  |  |  |  |  |  |  |  |
Net income (loss) attributable to common stockholders | $ | (4) |  |  | $ | (12) |  |  | $ | 37 |  |  | $ | 100 |  |  |  |  |  |  |  |  |
Denominator |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average shares outstanding | 145,878 |  |  | 375,380 |  |  | 141,568 |  |  | 376,315 |  |  |  |  |  |  |  |  |
Basic and Diluted Earnings (Loss) Per Share | $ | (0.03) |  |  | $ | (0.03) |  |  | $ | 0.27 |  |  | $ | 0.27 |  |  |  |  |  |  |  |  |
| Nine Months Ended June 30, |  |  |  |  |  |  |  |
| 2025 |  | 2024 |  |  |  |  |  |  |  |
| Class A |  | Class B |  | Class A |  | Class B |  |  |  |  |  |  |  |
Basic and Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income attributable to Warner Music Group Corp. | $ | 73 |  |  | $ | 183 |  |  | $ | 111 |  |  | $ | 283 |  |  |  |  |  |  |  |  |
Less: Net income attributable to participating securities (a) | (3) |  |  | — |  |  | (5) |  |  | — |  |  |  |  |  |  |  |  |
Net income attributable to common stockholders | $ | 70 |  |  | $ | 183 |  |  | $ | 106 |  |  | $ | 283 |  |  |  |  |  |  |  |  |
Denominator |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average shares outstanding | 144,623 |  |  | 375,380 |  |  | 140,531 |  |  | 376,868 |  |  |  |  |  |  |  |  |
Basic and Diluted EPS | $ | 0.49 |  |  | $ | 0.49 |  |  | $ | 0.75 |  |  | $ | 0.75 |  |  |  |  |  |  |  |  |

______________________________________
(a)Participating securities include unvested restricted stock units, which include the right to receive non-forfeitable dividend equivalents. Participating securities are not contractually obligated to share in losses.
9

4. Revenue Recognition
Disaggregation of Revenue
The Company’s revenue consists of the following categories, which aggregate into the segments – Recorded Music and Music Publishing:

| Three Months Ended June 30, |  | Nine Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (in millions)
Revenue by Type |  |  |  |  |  |  |
Digital | $ | 929 |  |  | $ | 882 |  |  | $ | 2,643 |  |  | $ | 2,638 |
Physical | 119 |  |  | 120 |  |  | 397 |  |  | 385 |
Total digital and physical | 1,048 |  |  | 1,002 |  |  | 3,040 |  |  | 3,023 |
Artist services and expanded-rights | 195 |  |  | 159 |  |  | 508 |  |  | 489 |
Licensing | 111 |  |  | 90 |  |  | 326 |  |  | 373 |
Total Recorded Music | 1,354 |  |  | 1,251 |  |  | 3,874 |  |  | 3,885 |
Performance | 58 |  |  | 52 |  |  | 167 |  |  | 155 |
Digital | 204 |  |  | 194 |  |  | 599 |  |  | 577 |
Mechanical | 16 |  |  | 13 |  |  | 46 |  |  | 43 |
Synchronization | 54 |  |  | 42 |  |  | 142 |  |  | 129 |
Other | 4 |  |  | 4 |  |  | 15 |  |  | 11 |
Total Music Publishing | 336 |  |  | 305 |  |  | 969 |  |  | 915 |
Intersegment eliminations | (1) |  |  | (2) |  |  | (4) |  |  | (4) |
Total revenues | $ | 1,689 |  |  | $ | 1,554 |  |  | $ | 4,839 |  |  | $ | 4,796 |
Revenue by geographical location |  |  |  |  |  |  |
U.S. Recorded Music | $ | 536 |  |  | $ | 517 |  |  | $ | 1,565 |  |  | $ | 1,652 |
U.S. Music Publishing | 186 |  |  | 161 |  |  | 520 |  |  | 503 |
Total U.S. | 722 |  |  | 678 |  |  | 2,085 |  |  | 2,155 |
International Recorded Music | 818 |  |  | 734 |  |  | 2,309 |  |  | 2,233 |
International Music Publishing | 150 |  |  | 144 |  |  | 449 |  |  | 412 |
Total international | 968 |  |  | 878 |  |  | 2,758 |  |  | 2,645 |
Intersegment eliminations | (1) |  |  | (2) |  |  | (4) |  |  | (4) |
Total revenues | $ | 1,689 |  |  | $ | 1,554 |  |  | $ | 4,839 |  |  | $ | 4,796 |

Sales Returns and Uncollectible Accounts
Based on management’s analysis of sales returns, refund liabilities of $16 million and $20 million were established at June 30, 2025 and September 30, 2024, respectively.
Based on management’s analysis of estimated credit losses, reserves of $24 million and $26 million were established at June 30, 2025 and September 30, 2024, respectively.
Deferred Revenue
Deferred revenue increased by $845 million during the nine months ended June 30, 2025 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period. Revenues of $197 million were recognized during the nine months ended June 30, 2025 related to the balance of deferred revenue at September 30, 2024. There were no other significant changes to deferred revenue during the reporting period.
Performance Obligations
For the three months ended June 30, 2025 and June 30, 2024, the Company recognized revenue of $10 million and $35 million, respectively, from performance obligations satisfied in previous periods. For the nine months ended June 30, 2025 and June 30, 2024, the Company recognized revenue of $67 million and $109 million, respectively, from performance obligations satisfied in previous periods.
10

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at June 30, 2025 are as follows:

| Rest of FY25 |  | FY26 |  | FY27 |  | Thereafter |  | Total
| (in millions)
Remaining performance obligations | $ | 422 |  |  | $ | 647 |  |  | $ | 171 |  |  | $ | 169 |  |  | $ | 1,409 |
Total | $ | 422 |  |  | $ | 647 |  |  | $ | 171 |  |  | $ | 169 |  |  | $ | 1,409 |

5. Comprehensive Income
Comprehensive income, which is reported in the accompanying condensed consolidated statements of equity, consists of net income and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income. For the Company, the components of other comprehensive income primarily consist of foreign currency translation gains and losses, minimum pension liabilities, and deferred gains and losses on financial instruments designated as hedges under ASC 815, Derivatives and Hedging. The following summary sets forth the changes in the components of accumulated other comprehensive loss.

| Foreign Currency Translation Loss (a) |  | Minimum Pension Liability Adjustment |  |  |  | Accumulated Other Comprehensive Loss, net
| (in millions)
Balances at September 30, 2024 | $ | (244) |  |  | $ | (3) |  |  |  |  | $ | (247) |
Other comprehensive income | 73 |  |  | — |  |  |  |  | 73 |
Balances at June 30, 2025 | $ | (171) |  |  | $ | (3) |  |  |  |  | $ | (174) |

______________________________________
(a)Includes historical foreign currency translation related to certain intra-entity transactions.
6. Goodwill and Intangible Assets
Goodwill
The following analysis details the changes in goodwill for each reportable segment:

| Recorded Music |  | Music Publishing |  | Total
| (in millions)
Balances at September 30, 2024 | $ | 1,557 |  |  | $ | 464 |  |  | $ | 2,021 |
Acquisitions | 22 |  |  | — |  |  | 22 |
Other adjustments (a) | 21 |  |  | — |  |  | 21 |
Balances at June 30, 2025 | $ | 1,600 |  |  | $ | 464 |  |  | $ | 2,064 |

______________________________________
(a)Other adjustments during the nine months ended June 30, 2025 represent foreign currency movements.
The Company performs its annual goodwill impairment test in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”) during the fourth quarter of each fiscal year as of July 1. The Company may conduct an earlier review if events or circumstances occur that would suggest the carrying value of the Company’s goodwill may not be recoverable. No indicators of impairment were identified during the current period that required the Company to perform an interim assessment or recoverability test.
11

Intangible Assets
Intangible assets consist of the following:

| Weighted-Average Useful Life |  | June 30, 2025 |  | September 30, 2024
|  |  | (in millions)
Intangible assets subject to amortization: |  |  |  |  |
Recorded music catalog | 12 years |  | $ | 1,780 |  |  | $ | 1,616 |
Music publishing copyrights | 24 years |  | 2,677 |  |  | 2,227 |
Artist and songwriter contracts | 13 years |  | 1,143 |  |  | 1,125 |
Trademarks | 16 years |  | 55 |  |  | 69 |
Other intangible assets | 6 years |  | 88 |  |  | 69 |
Total gross intangible assets subject to amortization |  |  | 5,743 |  |  | 5,106 |
Accumulated amortization |  |  | (2,979) |  |  | (2,747) |
Total net intangible assets subject to amortization |  |  | 2,764 |  |  | 2,359 |
Intangible assets not subject to amortization: |  |  |  |  |
Trademarks and tradenames | Indefinite |  | 154 |  |  | 152 |
Total net intangible assets |  |  | $ | 2,918 |  |  | $ | 2,511 |

The increase in net intangible assets during the nine months ended June 30, 2025 is primarily related to the acquisition of Tempo Music Holdings, LLC (“Tempo”) which is further described below. Additionally, the Company completed various business combinations during the nine months ended June 30, 2025 which resulted in the recognition of intangible assets with a preliminary estimated fair value of $39 million in the aggregate within recorded music catalogs, artist and songwriter contracts, trademarks, and other intangibles. The increase in net intangible assets was partially offset by the impairment of trademarks and other intangible assets of $29 million, in the aggregate, within the Recorded Music segment.
On February 5, 2025, WMG Tempo Holdco LLC, a wholly owned subsidiary of Acquisition Corp. and an indirect subsidiary of the Company, which has majority representation on the board of WMG Tempo Holdco LLC, acquired a 50.1% interest in Tempo, a proprietary music rights acquisition platform, for consideration of $76 million, including transaction costs, with an option, exercisable on or prior to November 30, 2027, to acquire the remaining 49.9% of Tempo for approximately $73 million, subject to contractual adjustments. The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations, and the Company recognized $351 million of music publishing copyrights and $87 million of recorded music catalogs which will each be amortized over an estimated useful life of 15 years. Additionally, the Company recognized approximately $13 million of net assets, which consists primarily of cash and accounts receivables. In connection with the transaction, the Company assumed long-term debt held by one of Tempo’s subsidiaries, which was recognized on the acquisition date at its estimated fair value of approximately $302 million. The assumed long-term debt is secured only by certain music rights owned by Tempo and is nonrecourse to the Company and its subsidiaries, other than Tempo (refer to Note 7 for more information on the acquired long-term debt). Finally, the Company recognized a corresponding noncontrolling interest of $73 million based on the fair value of the acquired assets.
12

7. Debt
Debt Capitalization
As of June 30, 2025, our long-term debt consists of the following:

| June 30, 2025 |  | September 30, 2024
| (in millions)
Revolving Credit Facility (a) | $ | — |  |  | $ | — |
Senior Term Loan Facility due 2031 | 1,295 |  |  | 1,295 |
2.750% Senior Secured Notes due 2028 | 381 |  |  | 363 |
3.750% Senior Secured Notes due 2029 | 540 |  |  | 540 |
3.875% Senior Secured Notes due 2030 | 535 |  |  | 535 |
2.250% Senior Secured Notes due 2031 | 522 |  |  | 497 |
3.000% Senior Secured Notes due 2031 | 800 |  |  | 800 |
Mortgage Term Loan due 2033 | 17 |  |  | 18 |
Total debt, including the current portion | 4,090 |  |  | 4,048 |
Premium less unamortized discount and unamortized DFCs | (29) |  |  | (34) |
Total Acquisition Corp. long-term debt, including the current portion, net | $ | 4,061 |  |  | $ | 4,014 |
Tempo Asset-Based Notes due 2050 | 311 |  |  | — |
Unamortized discount | (9) |  |  | — |
Total asset-based long-term debt, including the current portion, net (b) | $ | 302 |  |  | $ | — |
Total long-term debt, including the current portion, net | $ | 4,363 |  |  | $ | 4,014 |

______________________________________
(a)Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2025 and September 30, 2024. There were no loans outstanding under the Revolving Credit Facility as of June 30, 2025 and September 30, 2024.
(b)The Tempo Asset-Based Notes due 2050 are secured only by certain music rights owned by Tempo and are nonrecourse to the Company and its subsidiaries, other than Tempo.
The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. Acquisition Corp. is party to and the borrower under a $1,295 million senior secured term loan credit facility, pursuant to a credit agreement dated November 1, 2012, as amended or supplemented (the “Senior Term Loan Credit Agreement”) with JPMorgan Chase Bank NA, as administrative agent and collateral agent, and the other financial institutions and lenders from time to time party thereto (the “Senior Term Loan Facility”). Additionally, as of June 30, 2025 Acquisition Corp. had issued and outstanding the 2.750% Senior Secured Notes due 2028, the 3.750% Senior Secured Notes due 2029, the 3.875% Senior Secured Notes due 2030, the 2.250% Senior Secured Notes due 2031 and the 3.000% Senior Secured Notes due 2031 (together, the “Acquisition Corp. Notes”).
All of the Acquisition Corp. Notes are guaranteed by all of Acquisition Corp.’s domestic wholly-owned subsidiaries. The guarantee of the Acquisition Corp. Notes by Acquisition Corp.’s domestic wholly-owned subsidiaries is full, unconditional and joint and several. The secured notes are guaranteed on a senior secured basis.
The Company and Holdings are holding companies that conduct substantially all of their business operations through Acquisition Corp. Accordingly, while Acquisition Corp. and its subsidiaries are not currently restricted from distributing funds to the Company and Holdings under the indentures for the Acquisition Corp. Notes or the credit agreements for the Acquisition Corp. Senior Credit Facilities, including the Revolving Credit Facility (as defined below) and the Senior Term Loan Facility, should Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increase above 3.50:1.00 and the term loans not achieve an investment grade rating, the covenants under the Revolving Credit Facility, which are currently suspended, will be reinstated and the ability of the Company and Holdings to obtain funds from their subsidiaries will be restricted by the Revolving Credit Facility. The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of June 30, 2025.
Fiscal 2025 Transactions
Acquisition of Tempo
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Following its acquisition of Tempo on February 5, 2025, the Company holds approximately $311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo and secured only by certain music rights owned by Tempo and is nonrecourse to the Company and its subsidiaries, other than Tempo. These notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62% until November 30, 2027, with higher interest rates thereafter. Principal and interest are payable in equal semi-annual installments.
Beethoven Credit Agreement
On June 29, 2025, the Company, through its wholly owned indirect subsidiary, WMG BC Holdco LLC, entered into a joint venture agreement (the “JV Agreement”) with BCSS W JV Investments (B), L.P. (“BainCo”), a Delaware limited partnership and wholly owned indirect subsidiary of Bain Capital Special Situations, LP, pursuant to which the Company and BainCo will operate Beethoven JV 1, LLC, a Delaware limited liability company.
In connection with the JV Agreement, on the same date, Beethoven Financing 1, LLC, a Delaware limited liability company and an indirect subsidiary of the Company, as borrower (the “Initial Borrower”), the additional borrowers from time to time party thereto (together with the Initial Borrower, the “Borrowers”), Beethoven Holdings 1, LLC, a Delaware limited liability company, as guarantor (the “Initial Guarantor”), the additional guarantors from time to time party thereto (together with the Initial Guarantor, the “Guarantors”), each of the commercial paper conduits from time to time party thereto (the “Conduit Lenders”), each of the financial institutions from time to time party thereto as committed lenders (the “Committed Lenders” and, together with the Conduit Lenders, the “Lenders”), the conduit managing agents from time to time party thereto, The Bank of New York Mellon, as administrative agent for the Lenders and as collateral agent for the Secured Parties (in each case, as defined in the Beethoven Credit Agreement), entered into a Credit and Security Agreement (the “Beethoven Credit Agreement”) pursuant to which the Lenders have agreed to extend up to $500 million in commitment amounts to the Borrowers (the “Beethoven Credit Facility”). The obligations of the Borrowers under the Beethoven Credit Agreement will be (a) secured by the Borrowers with a first priority security interest in all of their respective assets and (b) guaranteed by the Guarantors with a first priority security interest in all of their respective assets.
The advances under the Beethoven Credit Agreement shall bear interest at the rates described below under “—Interest Rates.”
The Beethoven Credit Agreement contains customary affirmative and negative covenants for this type of facility, and the ability, subject to the consent of the Lenders, to increase the size of the facility to $700 million.
Interest Rates
The loans under the Revolving Credit Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Revolving Term SOFR”), and other rates for alternate currencies, such as EURIBOR and SONIA, as provided in the Revolving Credit Agreement, subject to a zero floor, plus 1.75% per annum in the case of Initial Revolving Loans (as defined in the Revolving Credit Agreement), or 1.875% per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0% per annum, plus, in each case, 0.75% per annum in the case of Initial Revolving Loans, or 0.875% per annum in the case of 2020 Revolving Loans; provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement. Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.07x at June 30, 2025, the applicable margin for SOFR loans and risk-free rate loans would be 1.375% instead of 1.875% and the applicable margin for ABR loans would be 0.375% instead of 0.875% in the case of 2020 Revolving Loans. If there is a payment default at any time, then the interest rate applicable to overdue principal will be the rate otherwise applicable to such loan plus 2.0% per annum. Default interest will also be payable on other overdue amounts at a rate of 2.0% per annum above the amount that would apply to an alternative base rate loan.
The loans under the Senior Term Loan Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the forward-looking term rate based on Term SOFR subject to a zero floor, plus 1.75% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, subject to a 1.00% floor, plus, in each case, 1.00% per annum. If there is a payment default at any time, then the interest rate applicable to overdue principal and interest will be the rate otherwise applicable to such loan plus 2.00% per annum. Default interest will also be payable on other overdue amounts at a rate of 2.00% per annum above the amount that would apply to an alternative base rate loan.
The term loan entered into on January 27, 2023 (the “Term Loan Mortgage”) bears interest at a rate of 30-day SOFR plus the applicable margin of 1.40%, subject to a zero floor.
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Interest on the Asset-Based Notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62% until November 30, 2027. Following November 30, 2027, if the Asset-Based Notes remain outstanding, the interest rate on the outstanding Asset-Based Notes will increase by a per annum rate equal to the greater of: (i) 5.0% and (ii) the amount, if any, by which the sum of the following exceeds the interest rate otherwise payable with respect to such Asset-Based Notes: (A) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on November 30, 2027 of the U.S. treasury security having a term closest to seven years plus (B) 5.0%, plus (C) with respect to class A notes, 3.53% and, with respect to class B notes, 4.28%.
The advances under the Beethoven Credit Agreement shall bear interest (a) in the case of a base rate advance, at a rate equal to the base rate, which means, for any day, the highest of (i) the prime rate in effect on such day; (ii) the federal funds rate in effect on such day plus 0.50%; and (iii) Term SOFR for a one-month tenor in effect on such day plus 1.00% per annum, plus the applicable margin of 1.00% and (b) in the case of a Term SOFR advance, the Term SOFR for the interest accrual period plus the applicable margin of 2.00%.
The Company has entered into, and in the future may enter into, interest rate swaps to manage interest rate risk. As of June 30, 2025, there are no interest rate swaps outstanding.
Maturity of Senior Term Loan Facility
The loans outstanding under the Senior Term Loan Facility mature on January 24, 2031.
Maturity of Revolving Credit Facility
The maturity date of the Revolving Credit Facility is November 30, 2028.
Maturities of Senior Secured Notes
As of June 30, 2025, there are no scheduled maturities of notes until 2028, when $381 million is scheduled to mature. Thereafter, $2.708 billion is scheduled to mature.
Maturity of Term Loan Mortgage
The maturity date of the Term Loan Mortgage is January 27, 2033, subject to a call option exercisable by Truist Bank at any time after January 27, 2028 if certain criteria relating to the Company’s creditworthiness are met.
Maturity of Tempo Asset-Based Notes
The maturity date of the Asset-Based Notes is November 30, 2050.
Maturity of Beethoven Credit Agreement
The maturity date of the Beethoven Credit Facility is June 29, 2030.
Interest Expense, net
Total interest expense, net was $43 million and $40 million for the three months ended June 30, 2025 and 2024, respectively, and $119 million and $121 million for the nine months ended June 30, 2025 and 2024, respectively. Interest expense, net includes interest expense related to our outstanding indebtedness of $45 million and $46 million for the three months ended June 30, 2025 and 2024, respectively, and $132 million and $137 million for the nine months ended June 30, 2025 and 2024, respectively. The weighted-average interest rate of the Company’s total debt was 4.1% at June 30, 2025, 4.3% at September 30, 2024, and 4.5% at June 30, 2024.
8. Restructuring and Impairments
2024 Strategic Restructuring Plan
In 2024, the Company announced a strategic restructuring plan (the “2024 Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade. The 2024 Strategic Restructuring Plan is substantially complete and the remaining associated cash payments are expected to be made by the end of fiscal year 2026.
For the three months ended June 30, 2025, the Company recognized a $1 million benefit in our Recorded Music segment due a change in estimate of severance costs. For the nine months ended June 30, 2025, total severance and other contract termination costs recorded in connection with the 2024 Strategic Restructuring Plan were $7 million, of which $8 million of expense was recognized in
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our Recorded Music segment while there was a $1 million benefit recognized at Corporate due to a change in estimate. Additionally, for the nine months ended June 30, 2025, the Company recognized $32 million of impairment losses, all of which were recognized in our Recorded Music segment. Impairment charges recognized during the period primarily relate to the write-off of certain long-form audiovisual production assets and lease termination costs for office closures.
As of June 30, 2025, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $217 million with $207 million of costs recognized in our Recorded Music segment and $10 million recognized at Corporate. These costs are composed of $135 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges.
The below table sets forth the activity for the nine months ended June 30, 2025 in the restructuring accrual associated with the 2024 Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

| Severance Costs |  | Contract Termination Costs |  | Total
| (in millions)
Balance at September 30, 2024 | $ | 99 |  |  | $ | 5 |  |  | $ | 104 |
Restructuring charges | — |  |  | 7 |  |  | 7 |
Cash payments | (63) |  |  | (5) |  |  | (68) |
Foreign currency movements | — |  |  | — |  |  | — |
Balance at June 30, 2025 | $ | 36 |  |  | $ | 7 |  |  | $ | 43 |

Other Impairments
For the three and nine months ended June 30, 2025, the Company recognized a pre-tax impairment charge of $70 million ($48 million after-tax) within the Recorded Music segment for long-lived assets associated with certain of the Company’s non-core e-tailer operations due to a triggering event that indicated the carrying amount was no longer recoverable. The recoverable fair value was determined based on current market indicators.
9. Commitments and Contingencies
From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of business. The Company is currently subject to several such claims and legal proceedings. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors.
10. Equity
Stock-Based Compensation
The Company’s stock-based compensation plans are described in Note 14, “Equity,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Stock-based compensation consists primarily of common stock, restricted stock units, stock options, and market-based performance share units granted to eligible employees and executives under the Omnibus Incentive Plan.
For the three months ended June 30, 2025, the Company recognized a total of $16 million of non-cash stock-based compensation expense, of which $15 million was recorded to additional paid-in capital and $1 million was recorded as a shared-based compensation liability. For the nine months ended June 30, 2025, the Company recognized a total of $43 million of non-cash stock-based compensation expense, of which $42 million was recorded to additional paid-in capital and $1 million was recorded as a shared-based compensation liability. For the three and nine months ended June 30, 2024, the Company recognized a total of $10 million and $28 million of non-cash stock-based compensation expense, respectively, all of which was recorded to additional paid-in capital. During the nine months ended June 30, 2025 and 2024, $7 million and $15 million of share-based compensation liabilities were reclassified to additional paid-in capital upon a certain number of awards becoming determinable, respectively.
Common Stock
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During the three and nine months ended June 30, 2025, in connection with the Senior Management Free Cash Flow Plan (the “Plan”), the Company issued a total of 869,009 and 2,607,027 shares, respectively, of Class A Common Stock to settle all remaining participants’ deferred equity units previously issued under the Plan.
During the three and nine months ended June 30, 2025, the Company satisfied the vesting of RSUs by issuing 5,959 and 800,748 shares of Class A Common Stock under the Omnibus Incentive Plan, respectively, which is net of shares used to settle employee income tax obligations.
Noncontrolling Interest
On August 5, 2025, the Company acquired the remaining equity interest from noncontrolling interest holders for an aggregate consideration of $165 million, which includes cash consideration of $40 million and $125 million payable in the form of the Company’s Class A Common Stock. The Company issued 1,416,666 shares of Class A Common Stock on the closing date and expects to issue an additional 2,750,000 shares of Class A Common Stock on the first anniversary of the closing. These shares are subject to specific lock-up periods.
Share Repurchase Program
On November 14, 2024, the Company’s board of directors authorized a new $100 million share repurchase program (the “Share Repurchase Program”), which is intended to offset dilution from the Omnibus Incentive Plan. Under this authorization, the Company may, from time to time, purchase shares of its Class A Common Stock through open market transactions, privately negotiated transactions, forward, derivative, or accelerated repurchase transactions, tender offers or otherwise, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act. The $100 million share repurchase authorization does not obligate the Company to purchase any shares and the Share Repurchase Program does not have a fixed expiration date. The Company may enter into a pre-arranged stock trading plan in accordance with the guidelines specified under Rule 10b5-1 to effectuate all or a portion of the Share Repurchase Program. The Company expects to finance any repurchases from a combination of cash on hand and cash provided by operating activities. The timing and method of any repurchases, which will depend on a variety of factors, including market conditions, are subject to our results of operations, financial condition, liquidity and other factors. The authorization for the Share Repurchase Program may be suspended, terminated, increased or decreased by the Company’s board of directors at any time.
The following table summarizes our total share repurchases and retirement under the Share Repurchase Program during the three and nine months ended June 30, 2025:

|  | Three Months Ended June 30, 2025 |  | Nine Months Ended June 30, 2025
Share Repurchase Type |  | Shares |  |  |  | Amount (in millions) |  | Shares |  | Amount (in millions)
Open Market Repurchases |  | 20,000 |  |  |  |  | $ | 1 |  |  | 80,383 |  |  | $ | 3 |

11. Income Taxes
For the three and nine months ended June 30, 2025, the Company recorded an income tax expense of $5 million and $123 million, respectively. The income tax expense for the three and nine months ended June 30, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, non-deductible executive compensation under Internal Revenue Code (“IRC”) Section 162(m), and the net impact of GILTI and foreign derived intangible income (“FDII”). These charges were partially offset by a tax benefit recognized on an impairment charge associated with certain of the Company’s non-core e-tailer operations. The income tax expense for the nine months ended June 30, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S. state and local taxes, non-deductible executive compensation under IRC Section 162(m), unrecognized tax benefit related to uncertain tax positions, and the net impact of GILTI and FDII. These charges were partially offset by tax benefits associated with Research and Development (“R&D”) credits, and non-controlling interest.
For the three and nine months ended June 30, 2024, the Company recorded an income tax expense of $30 million and $120 million, respectively. The income tax expense for the three and nine months ended June 30, 2024 is lower than the expected tax benefit at the statutory tax rate of 21% primarily due to benefits related to updated allowable costs for reported FDII, non-controlling interest, and the net impact of GILTI and FDII. These benefits were partially offset by foreign income taxed at rates higher than the United States, withholding taxes, and U.S. state and local taxes. The income tax expense for the nine months ended June 30, 2024 is lower than the expected tax expense at the statutory rate of 21% primarily due to the tax benefit from the winding down of the Company’s owned and operated media properties, updated allowable costs for FDII, non-controlling interest, the net impact of GILTI
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and FDII and tax benefits associated with R&D credits. These benefits were partially offset by withholding taxes, foreign income taxed at rates higher than the United States, U.S. state and local taxes, non-deductible executive compensation under IRC Section 162(m), and unrecognized tax benefit related to uncertain tax positions.
The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of June 30, 2025 could decrease by up to approximately $2 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.
The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, have enacted or are expected to enact legislation with general implementation of a global minimum tax rate by January 1, 2025. The Company has evaluated the potential impact of the rules based on the most recently available information and estimates that the impact to the Company is immaterial. The Company will continue to monitor legislative developments to determine if there are significant changes to Pillar 2 rules that could lead to a material impact.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which introduces a wide-ranging set of tax reform provisions. These provisions are scheduled to take affect beginning in our fiscal year 2026. The Company is currently evaluating the potential impact of this law.
12. Derivative Financial Instruments
The Company uses derivative financial instruments, primarily foreign currency forward exchange contracts, for the purposes of managing foreign currency exchange rate risk on expected future cash flows.
As of June 30, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $197 million and the purchase of $124 million of foreign currencies at fixed rates that will be settled by September 2025. As of September 30, 2024, the Company had no foreign currency forward exchange contracts outstanding.
The Company recorded realized pre-tax gains of $7 million and unrealized pre-tax losses of $5 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the nine months ended June 30, 2025. The Company recorded realized pre-tax losses of $1 million and unrealized pre-tax gains of $1 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the nine months ended June 30, 2024.
The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at June 30, 2025 and September 30, 2024:

| June 30, 2025 |  | September 30, 2024
| (in millions)
Other Current Assets: |  |  |
Foreign currency forward exchange contracts (a) | 1 |  |  | — |
Other Current Liabilities: |  |  |
Foreign currency forward exchange contracts (a) | (6) |  |  | — |

______________________________________
(a)Includes $9 million and $14 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $1 million of current assets and $6 million of current liabilities, respectively.
13. Segment Information
Based on the nature of its products and services, the Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing, which also represent the reportable segments of the Company. Information as to each of these operations is set forth below. The Company evaluates performance based on several factors, of which the primary financial measure is operating income (loss) before non-cash depreciation of tangible assets and non-cash amortization of intangible assets adjusted to exclude the impact of non-cash stock-based compensation and other related expenses and certain items that affect comparability including but not limited to gains or losses on divestitures and expenses related to restructuring and transformation initiatives, which includes costs associated with the Company’s financial transformation initiative to design and implement new information technology and upgrade our finance infrastructure (“Adjusted OIBDA”). Items excluded are not viewed to contribute directly to management’s evaluation of operating results.
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The accounting policies of the Company’s business segments are the same as those described in Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The Company accounts for intersegment sales at fair value as if the sales were to third parties. While intercompany transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses recognized by the segment that is counterparty to the transaction) are eliminated in consolidation, and therefore, do not themselves impact consolidated results.

| Recorded Music |  | Music Publishing |  | Corporate expenses and eliminations |  | Total
Three Months Ended | (in millions)
June 30, 2025 |  |  |  |  |  |  |
Revenues | $ | 1,354 |  |  | $ | 336 |  |  | $ | (1) |  |  | $ | 1,689 |
Adjusted OIBDA | 321 |  |  | 96 |  |  | (44) |  |  | 373 |
June 30, 2024 |  |  |  |  |  |  |
Revenues | $ | 1,251 |  |  | $ | 305 |  |  | $ | (2) |  |  | $ | 1,554 |
Adjusted OIBDA | 281 |  |  | 79 |  |  | (44) |  |  | 316 |
| Recorded Music |  | Music Publishing |  | Corporate expenses and eliminations |  | Total
Nine Months Ended | (in millions)
June 30, 2025 |  |  |  |  |  |  |
Revenues | $ | 3,874 |  |  | $ | 969 |  |  | $ | (4) |  |  | $ | 4,839 |
Adjusted OIBDA | 914 |  |  | 264 |  |  | (139) |  |  | 1,039 |
June 30, 2024 |  |  |  |  |  |  |
Revenues | 3,885 |  |  | 915 |  |  | (4) |  |  | 4,796 |
Adjusted OIBDA | 965 |  |  | 247 |  |  | (133) |  |  | 1,079 |

Adjusted OIBDA is not a measure defined by U.S. GAAP but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of the Company’s Adjusted OIBDA to operating income is presented below.

|  | For the Three Months Ended June 30, |  | For the Nine Months Ended June 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Operating income |  | $ | 169 |  |  | $ | 207 |  |  | $ | 551 |  |  | $ | 680 |
Amortization expense |  | 67 |  |  | 55 |  |  | 186 |  |  | 167 |
Depreciation expense |  | 29 |  |  | 25 |  |  | 86 |  |  | 77 |
Restructuring and impairments |  | 69 |  |  | 1 |  |  | 109 |  |  | 96 |
Transformation initiative costs |  | 19 |  |  | 18 |  |  | 54 |  |  | 56 |
Executive transition costs |  | 4 |  |  | — |  |  | 4 |  |  | — |
Net gain on divestitures |  | — |  |  | (1) |  |  | — |  |  | (32) |
Non-cash stock-based compensation and other related costs |  | 16 |  |  | 11 |  |  | 49 |  |  | 35 |
Adjusted OIBDA |  | $ | 373 |  |  | $ | 316 |  |  | $ | 1,039 |  |  | $ | 1,079 |

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14. Additional Financial Information
Supplemental Cash Flow Disclosures
The Company made interest payments of approximately $43 million and $35 million during the three months ended June 30, 2025 and 2024, respectively, and approximately $114 million and $125 million during the nine months ended June 30, 2025 and 2024, respectively. The Company paid approximately $50 million and $33 million of income and withholding taxes, net of refunds, for the three months ended June 30, 2025 and 2024, respectively, and approximately $151 million and $105 million of income and withholding taxes, net of refunds, for the nine months ended June 30, 2025 and 2024, respectively. Non-cash investing activities were approximately $32 million related to business combinations and the acquisition of music publishing rights and music catalogs during the nine months ended June 30, 2025, and $18 million related to the acquisition of music publishing rights and music catalogs during the nine months ended June 30, 2024.
Net Gain on Divestitures
The Company recognized a pre-tax gain of $1 million during the three months ended June 30, 2024, in connection with the divestiture of non-core owned and operated media properties. The Company recognized a pre-tax gain of $32 million during the nine months ended June 30, 2024 in connection with the divestiture of certain sound recordings rights. For each period, the divestiture has been reflected as a net gain on divestiture in the accompanying condensed consolidated statement of operations.
Net Gain on Sale of Investments
The Company recognized a pre-tax realized net gain of $29 million during the nine months ended June 30, 2025 in connection with the sale of an investment which has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.
Dividends
The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating.
The Company has been paying quarterly cash dividends to holders of its Class A Common Stock and Class B Common Stock. The declaration of each dividend will continue to be at the discretion of the Company’s board of directors and will depend on the Company’s financial condition, earnings, liquidity and capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and any other factors that the Company’s board of directors deems relevant in making such a determination. Therefore, there can be no assurance that the Company will pay any dividends to holders of the Company’s common stock, or as to the amount of any such dividends.
On May 16, 2025, the Company’s board of directors declared a cash dividend of $0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on June 3, 2025. The Company paid an aggregate of approximately $94 million and $283 million, or $0.18 and $0.54 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2025.
On August 7, 2025, the Company’s board of directors declared a cash dividend of $0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on September 3, 2025 to stockholders of record as of the close of business on August 20, 2025.
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15. Fair Value Measurements
The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of June 30, 2025 and September 30, 2024.

| Fair Value Measurements as of June 30, 2025
| (Level 1) |  | (Level 2) |  | (Level 3) |  | Total
| (in millions)
Other Current Assets: |  |  |  |  |  |  |
Foreign currency forward exchange contracts (a) | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Other current liabilities: |  |  |  |  |  |  |
Foreign currency forward exchange contracts (a) | $ | — |  |  | $ | (6) |  |  | $ | — |  |  | $ | (6) |
Other noncurrent assets: |  |  |  |  |  |  |
Equity investments with readily determinable fair value (b) | 9 |  |  | — |  |  | — |  |  | 9 |

| Fair Value Measurements as of September 30, 2024
| (Level 1) |  | (Level 2) |  | (Level 3) |  | Total
| (in millions)
Other noncurrent assets: |  |  |  |  |  |  |
Equity investment with readily determinable fair value (b) | 9 |  |  | — |  |  | — |  |  | 9 |

______________________________________
(a)The fair value of foreign currency forward exchange contracts is based on dealer quotes of market forward rates and reflects the amount that the Company would receive or pay at their maturity dates for contracts involving the same currencies and maturity dates.
(b)These represent equity investments with a readily determinable fair value. The Company has measured its investments to fair value in accordance with ASC 321, Investments—Equity Securities, based on quoted prices in active markets.
The majority of the Company’s non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the asset is written down to its fair value. In addition, an impairment analysis is performed at least annually for goodwill and indefinite-lived intangible assets.
Equity Investments Without Readily Determinable Fair Value
The Company evaluates its equity investments without readily determinable fair values for impairment if factors indicate that a significant decrease in value has occurred. The Company has elected to use the measurement alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes. In the three and nine month periods ended June 30, 2025, the Company recorded approximately $1 million and $4 million of impairment charges on these investments, respectively. The Company did not record any impairment charges on these investments during the three months ended June 30, 2024 and recorded approximately $1 million of impairment charges on these investments during the nine months ended June 30, 2024. In addition, there were no observable price changes events that were completed during the three and nine months ended June 30, 2025 and 2024.
Fair Value of Debt
Based on the level of interest rates prevailing at June 30, 2025, the fair value of the Company’s debt was $4.217 billion. Based on the level of interest rates prevailing at September 30, 2024, the fair value of the Company’s debt was $3.836 billion. The fair value of the Company’s debt instruments is determined using quoted market prices from less active markets or by using quoted market prices for instruments with identical terms and maturities; both approaches are considered a Level 2 measurement.
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16. Subsequent Events
2025 Restructuring Plan
On July 1, 2025, the Company announced a strategic restructuring plan (the “2025 Restructuring Plan”) designed to free up funds to invest in music and to accelerate the Company’s long-term growth. The Company expects the 2025 Restructuring Plan to generate pre-tax cost savings of approximately $300 million on an annualized run-rate basis by the end of fiscal year 2027 and expects the majority of the cost savings under the 2025 Restructuring Plan to be accretive to Adjusted OIBDA. There were no charges recognized under the 2025 Restructuring Plan for the three and nine months ended June 30, 2025.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our results of operations and financial condition with the unaudited interim financial statements included elsewhere in this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2025 (the “Quarterly Report”).
“SAFE HARBOR” STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report includes forward-looking statements and cautionary statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms or the negative thereof. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report and include, without limitation, our ability to compete in the highly competitive markets in which we operate, statements regarding our ability to develop talent and attract future talent, our ability to reduce future capital expenditures, our ability to monetize our music, including through new distribution channels and formats to capitalize on the growth areas of the music entertainment industry, our ability to effectively deploy our capital, the development of digital music and the effect of digital distribution channels on our business, including whether we will be able to achieve higher margins from digital sales, the success of strategic actions we are taking to accelerate our transformation as we redefine our role in the music entertainment industry, the effectiveness of our ongoing efforts to reduce overhead expenditures and manage our variable and fixed cost structure and our ability to generate expected cost savings from such efforts, our success in limiting piracy, the growth of the music entertainment industry and the effect of our and the industry’s efforts to combat piracy on the industry, our intention and ability to pay dividends or repurchase or retire our outstanding debt or notes in open market purchases, privately or otherwise, the impact on us of potential strategic transactions, our ability to fund our future capital needs and the effect of litigation on us.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to accurately predict all of them. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
•our inability to compete successfully in the highly competitive markets in which we operate;
•our ability to identify, sign and retain recording artists and songwriters and the existence or absence of superstar releases;
•slower growth in streaming adoption and revenue;
•our dependence on a limited number of digital music services for the online distribution and marketing of our music and their ability to significantly influence the pricing structure for online music stores;
•the popular demand for particular recording artists and/or songwriters and music and the timely delivery to us of music by major recording artists and/or songwriters;
•risks related to the effects of climate change and natural or man-made disasters;
•the diversity and quality of our recording artists, songwriters and releases;
•trends, developments or other events in the United States and in some foreign countries in which we operate, including the impact of tariffs imposed or threatened by the U.S. or foreign governments;
•risks associated with our non-U.S. operations, including limited legal protections of our intellectual property rights and restrictions on the repatriation of capital;
•unfavorable currency exchange rate fluctuations;
•the impact of heightened and intensive competition in the recorded music and music publishing industries and our inability to execute our business strategy;
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•significant fluctuations in our operations, cash flows and the trading price of our common stock from period to period;
•our failure to attract and retain our executive officers and other key personnel;
•a significant portion of our revenues are subject to rate regulation either by government entities or by local third-party collecting societies throughout the world and rates on other income streams may be set by governmental proceedings, which may limit our profitability;
•risks associated with obtaining, maintaining, protecting and enforcing our intellectual property rights;
•our involvement in intellectual property litigation;
•threats to our business associated with digital piracy, including organized industrial piracy;
•risks associated with the development and use of artificial intelligence;
•an impairment in the carrying value of goodwill or other intangible and long-lived assets;
•the impact of, and risks inherent in, acquisitions or other business combinations;
•risks inherent to our outsourcing certain finance and accounting functions;
•the fact that we have engaged in substantial restructuring activities in the past, and may need to implement further restructurings in the future and our restructuring efforts may not be successful or generate expected cost savings;
•our and our service providers’ ability to maintain the security of information relating to our customers, employees and vendors and our music;
•risks related to evolving laws and regulations concerning data privacy which might result in increased regulation and different industry standards;
•new legislation that affects the terms of our contracts with recording artists and songwriters;
•a potential loss of catalog if it is determined that recording artists have a right to recapture U.S. rights in their recordings under the U.S. Copyright Act;
•the impact of our substantial leverage on our ability to raise additional capital to fund our operations, on our ability to react to changes in the economy or our industry and on our ability to meet our obligations under our indebtedness;
•the ability to generate sufficient cash to service all of our indebtedness, and the risk that we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful;
•the fact that our debt agreements contain restrictions that may limit our flexibility in operating our business;
•the significant amount of cash required to service our indebtedness and the ability to generate cash or refinance indebtedness as it becomes due depends on many factors, some of which are beyond our control;
•our indebtedness levels, and the fact that we may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness;
•risks of downgrade, suspension or withdrawal of the rating assigned by a rating agency to us could impact our cost of capital;
•the dual class structure of our common stock and Access’s existing ownership of our Class B Common Stock have the effect of concentrating control over our management and affairs and over matters requiring stockholder approval with Access;
•the fact that we maintain certain cash deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits, which could have an adverse effect on liquidity and financial performance in the event of a bank failure or receivership; and
•risks related to other factors discussed under “Risk Factors” of this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
You should read this Quarterly Report completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this Quarterly Report are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
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Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Other risks, uncertainties and factors, including those discussed in the “Risk Factors” of our Quarterly Reports and our Annual Report on Form 10-K, could cause our actual results to differ materially from those projected in any forward-looking statements we make. You should read carefully the factors described in the “Risk Factors” section of our Quarterly Reports and our Annual Report on Form 10-K to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.
INTRODUCTION
Warner Music Group Corp. (the “Company”) was formed on November 21, 2003. The Company is the direct parent of WMG Holdings Corp. (“Holdings”), which is the direct parent of WMG Acquisition Corp. (“Acquisition Corp.”). Acquisition Corp. is one of the world’s major music entertainment companies.
The Company and Holdings are holding companies that conduct substantially all of their business operations through their subsidiaries. The terms “we,” “us,” “our,” “ours” and the “Company” refer collectively to Warner Music Group Corp. and its consolidated subsidiaries, except where otherwise indicated.
Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the unaudited financial statements and related notes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. MD&A is organized as follows:
•Business overview. This section provides a general description of our business, as well as a discussion of factors that we believe are important in understanding our results of operations and comparability and in anticipating future trends.
•Results of operations. This section provides an analysis of our results of operations for the three and nine months ended June 30, 2025 and June 30, 2024. This analysis is presented on both a consolidated and segment basis.
•Financial condition and liquidity. This section provides an analysis of our cash flows for the nine months ended June 30, 2025 and June 30, 2024, as well as a discussion of our financial condition and liquidity as of June 30, 2025. The discussion of our financial condition and liquidity includes recent debt financings and a summary of the key debt covenant compliance measures under our debt agreements.
Use of Adjusted OIBDA
We evaluate our operating performance based on several factors, including our primary financial measure of operating income (loss) before non-cash depreciation of tangible assets and non-cash amortization of intangible assets adjusted to exclude the impact of non-cash stock-based compensation and other related expenses and certain items that affect comparability including but not limited to gains or losses on divestitures and expenses related to restructuring and transformation initiatives (“Adjusted OIBDA”). We consider Adjusted OIBDA to be an important indicator of the operational strengths and performance of our businesses. However, a limitation of the use of Adjusted OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses. Accordingly, Adjusted OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) attributable to Warner Music Group Corp. and other measures of financial performance reported in accordance with United States generally accepted accounting principles (“U.S. GAAP”). In addition, our definition of Adjusted OIBDA may differ from similarly titled measures used by other companies. A reconciliation of consolidated Adjusted OIBDA to operating income (loss) and net income (loss) attributable to Warner Music Group Corp. is provided in our “Results of Operations.”
Use of Constant Currency
As exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of revenue and Adjusted OIBDA on a constant-currency basis in addition to reported results helps improve the ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant-currency information compares revenue and Adjusted OIBDA between periods as if exchange rates had remained constant period over period. We use revenue and Adjusted OIBDA on a constant-currency basis as one measure to evaluate our performance. We calculate constant-currency by calculating prior-year revenue and Adjusted OIBDA using current-year foreign currency exchange rates. We generally refer to such amounts calculated on a constant-currency basis as “excluding the impact of foreign currency exchange rates.” Revenue and Adjusted OIBDA on a constant-currency basis should be considered in addition to, not as a substitute for, revenue and Adjusted OIBDA reported in
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accordance with U.S. GAAP. Revenue and Adjusted OIBDA on a constant-currency basis, as we present it, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with U.S. GAAP.
BUSINESS OVERVIEW
We are one of the world’s leading music entertainment companies. Our renowned family of iconic record labels, including Atlantic Records, Warner Records, Elektra Records and Parlophone Records, is home to many of the world’s most popular and influential recording artists. In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 180,000 songwriters and composers, with a global collection of more than one and a half million musical compositions. We classify our business interests into two fundamental operations: Recorded Music and Music Publishing. A brief description of each of those operations is presented below.
Components of Our Operating Results
Recorded Music Operations
Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists. We play an integral role in virtually all aspects of the recorded music value chain from discovering and developing talent to producing, distributing and selling music to marketing and promoting recording artists and their music.
In the United States, our Recorded Music business is conducted principally through our major record labels—Atlantic Records and Warner Records. In October 2018, we launched Elektra Music Group in the United States as a standalone label group, which comprises the Elektra, Fueled by Ramen and Roadrunner labels, and in December 2021, we acquired 300 Entertainment and subsequently launched 300 Elektra Entertainment, or 3EE, a frontline label group that brings together the multi-genre power of 300 Entertainment and Elektra Music Group. Our Recorded Music business also includes Rhino Entertainment, a division that specializes in marketing our recorded music catalog through compilations, reissuances of previously released music and video titles and releasing previously unreleased material from our vault. We also conduct our Recorded Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, TenThousand Projects, Warner Classics and Warner Music Nashville.
Outside the United States, our Recorded Music business is conducted in more than 70 countries through various subsidiaries, affiliates and non-affiliated licensees. Internationally, we engage in the same activities as in the United States: discovering and signing artists and distributing, selling, marketing and promoting their music. In most cases, we also market, promote, distribute and sell the music of those recording artists for whom our domestic record labels have international rights. In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels.
Our Recorded Music business’ operations include WMX, a next generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways. This division includes a rebranded WEA commercial services & marketing network (formerly Warner-Elektra-Atlantic Corporation, or WEA Corp.), which markets, distributes and sells music and video products to retailers and wholesale distributors, as well as acting as the Company’s media and creative content arm. Our business’ distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors; and various distribution centers and ventures operated internationally.
In addition to our music being sold in physical retail outlets, our music is also sold in physical form to online physical retailers, such as amazon.com, barnesandnoble.com and bestbuy.com, and distributed in digital form to an expanded universe of digital partners, including streaming services such as those of Amazon, Apple, Deezer, SoundCloud, Spotify, Tencent Music and YouTube, radio services such as iHeart Radio and SiriusXM and other download services.
We have integrated the marketing of digital content into all aspects of our business, including artists and repertoire (“A&R”) and distribution. Our business development executives work closely with A&R departments to ensure that while music is being produced, digital assets are also created with all distribution channels in mind, including streaming services, social networking sites, online portals and music-centered destinations. We also work side-by-side with our online and mobile partners to test new concepts. We believe existing and new digital businesses will be a significant source of growth and will provide new opportunities to successfully monetize our assets and create new revenue streams. The proportion of digital revenues attributable to each distribution channel varies by region and proportions may change as the introduction of new technologies continues. As one of the world’s largest music entertainment companies, we believe we are well positioned to take advantage of growth in digital distribution and emerging technologies to maximize the value of our assets.
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We have diversified our revenues beyond our traditional businesses by entering into expanded-rights deals with recording artists in order to partner with such artists in other aspects of their careers. Under these agreements, we provide services to and participate in recording artists’ activities outside the traditional recorded music business such as touring, merchandising and sponsorships. We have built and acquired artist services capabilities and platforms for marketing and distributing this broader set of music-related rights and participating more widely in the monetization of the artist brands we help create. We believe that entering into expanded-rights deals and enhancing our artist services capabilities in areas such as merchandising, VIP ticketing, fan clubs, concert promotion and management has permitted us to diversify revenue streams and capitalize on other revenue opportunities. This provides for improved long-term relationships with our recording artists and allows us to more effectively connect recording artists and fans.
Recorded Music revenues are derived from four main sources:
•Digital: the rightsholder receives revenues with respect to streaming and download services;
•Physical: the rightsholder receives revenues with respect to sales of physical products such as vinyl, CDs and DVDs;
•Artist services and expanded-rights: the rightsholder receives revenues with respect to our artist services businesses and our participation in expanded rights, including advertising, merchandising such as direct-to-consumer sales, touring, concert promotion, ticketing, sponsorship, fan clubs, artist websites, social publishing, and artist and brand management; and
•Licensing: the rightsholder receives royalties or fees for the right to use sound recordings in combination with visual images such as in films or television programs, television commercials and video games; the rightsholder also receives royalties if sound recordings are performed publicly through broadcast of music on television, radio and cable, and in public spaces such as shops, workplaces, restaurants, bars and clubs.
The principal costs associated with our Recorded Music business are as follows:
•A&R costs: the costs associated with (i) paying royalties to recording artists, producers, songwriters, other copyright holders and trade unions; (ii) signing and developing recording artists; and (iii) creating master recordings in the studio;
•Product costs: the costs to manufacture, package and distribute products to wholesale and retail distribution outlets, the royalty costs associated with distributing products of independent labels to wholesale and retail distribution outlets, as well as the costs related to our artist services business;
•Selling and marketing expenses: the costs associated with the promotion and marketing of recording artists and music, including costs to produce music videos for promotional purposes and artist tour support; and
•General and administrative expenses: the costs associated with general overhead and other administrative expenses.
Music Publishing Operations
While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders.
The operations of our Music Publishing business are conducted principally through Warner Chappell Music, our global music publishing company headquartered in Los Angeles, with operations in over 70 countries through various subsidiaries, affiliates, and non-affiliated licensees and sub-publishers. We own or control rights to more than one and a half million musical compositions, including numerous pop hits, American standards, folk songs and motion picture and theatrical compositions. Assembled over decades, our award-winning catalog includes over 180,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel. Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios. We have an extensive production music catalog collectively branded as Warner Chappell Production Music.
Music Publishing revenues are derived from five main sources:
•Digital: the rightsholder receives revenues with respect to musical compositions embodied in recordings distributed in streaming services, download services, digital performance and other digital music services;
•Performance: the rightsholder receives revenues if the musical composition is performed publicly through broadcast of music on television, radio and cable and in retail locations (e.g., bars and restaurants), live performance at a
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concert or other venue (e.g., arena concerts and nightclubs), and performance of music in staged theatrical productions;
•Mechanical: the rightsholder receives revenues with respect to musical compositions embodied in recordings sold in any physical format or configuration such as vinyl, CDs and DVDs;
•Synchronization: the rightsholder receives revenues for the right to use the musical composition in combination with visual images such as in films or television programs, television commercials and video games as well as from other uses such as in toys or novelty items and merchandise; and
•Other: the rightsholder receives revenues for use in sheet music and other uses.
The principal costs associated with our Music Publishing business are as follows:
•A&R costs: the costs associated with (i) paying royalties to songwriters, co-publishers and other copyright holders in connection with income generated from the uses of their works and (ii) signing and developing songwriters; and
•Selling and marketing, general overhead and other administrative expenses: the costs associated with selling and marketing, general overhead and other administrative expenses.
Recent Events and Factors Affecting Results of Operations and Comparability
2024 Strategic Restructuring Plan
In 2024, the Company announced a strategic restructuring plan (the “2024 Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade. The 2024 Strategic Restructuring Plan is substantially complete and the remaining associated cash payments are expected to be made by the end of fiscal year 2026.
The cost savings under the 2024 Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of non-core operations, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformative initiative. The Company expects allocating a majority of the costs savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities.
For the three months ended June 30, 2025, the Company recognized a $1 million benefit in our Recorded Music segment due a change in estimate of severance costs. For the nine months ended June 30, 2025, total severance and other contract termination costs recorded in connection with the 2024 Strategic Restructuring Plan were $7 million, of which $8 million of expense was recognized in our Recorded Music segment while there was a $1 million benefit recognized at Corporate due to a change in estimate. Additionally, for the nine months ended June 30, 2025, the Company recognized $32 million of impairment losses, all of which were recognized in our Recorded Music segment. Impairment charges recognized during the period primarily relate to the write-off of certain long-form audiovisual production assets and lease termination costs for office closures.
Other Impairments
For the three and nine months ended June 30, 2025, the Company recognized a pre-tax impairment charge of $70 million ($48 million after-tax) within the Recorded Music segment for long-lived assets associated with certain of the Company’s non-core e-tailer operations due to a triggering event that indicated the carrying amount was no longer recoverable. The recoverable fair value was determined based on current market indicators.
BMG Termination
In September 2023, the Company terminated its distribution agreement with BMG as BMG began to bring digital distribution in-house and license directly with digital service partners in fiscal 2024 while also licensing its physical distribution with a different provider (the “BMG Termination”). Alternative Distribution Alliance (“ADA”), which is part of our Recorded Music business, had previously been distributing BMG’s recorded music catalog and revenues are reported within our Recorded Music segment. The shift to digital direct deals by BMG is a phased in-sourcing of distribution during the current fiscal year and we expect BMG to be rolled off by the end of the current fiscal year.
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RESULTS OF OPERATIONS
Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024
Consolidated Results
Revenues
Our revenues were composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Revenue by Type |  |  |  |  |  |  |
Digital | $ | 929 |  |  | $ | 882 |  |  | $ | 47 |  |  | 5 | %
Physical | 119 |  |  | 120 |  |  | (1) |  |  | -1 | %
Total digital and physical | 1,048 |  |  | 1,002 |  |  | 46 |  |  | 5 | %
Artist services and expanded-rights | 195 |  |  | 159 |  |  | 36 |  |  | 23 | %
Licensing | 111 |  |  | 90 |  |  | 21 |  |  | 23 | %
Total Recorded Music | 1,354 |  |  | 1,251 |  |  | 103 |  |  | 8 | %
Performance | 58 |  |  | 52 |  |  | 6 |  |  | 12 | %
Digital | 204 |  |  | 194 |  |  | 10 |  |  | 5 | %
Mechanical | 16 |  |  | 13 |  |  | 3 |  |  | 23 | %
Synchronization | 54 |  |  | 42 |  |  | 12 |  |  | 29 | %
Other | 4 |  |  | 4 |  |  | — |  |  | — | %
Total Music Publishing | 336 |  |  | 305 |  |  | 31 |  |  | 10 | %
Intersegment eliminations | (1) |  |  | (2) |  |  | 1 |  |  | -50 | %
Total revenues | $ | 1,689 |  |  | $ | 1,554 |  |  | $ | 135 |  |  | 9 | %
Revenue by Geographical Location |  |  |  |  |  |  |
U.S. Recorded Music | $ | 536 |  |  | $ | 517 |  |  | $ | 19 |  |  | 4 | %
U.S. Music Publishing | 186 |  |  | 161 |  |  | 25 |  |  | 16 | %
Total U.S. | 722 |  |  | 678 |  |  | 44 |  |  | 6 | %
International Recorded Music | 818 |  |  | 734 |  |  | 84 |  |  | 11 | %
International Music Publishing | 150 |  |  | 144 |  |  | 6 |  |  | 4 | %
Total international | 968 |  |  | 878 |  |  | 90 |  |  | 10 | %
Intersegment eliminations | (1) |  |  | (2) |  |  | 1 |  |  | -50 | %
Total revenues | $ | 1,689 |  |  | $ | 1,554 |  |  | $ | 135 |  |  | 9 | %

Total Revenues
Total revenues increased by $135 million, or 9%, to $1,689 million for the three months ended June 30, 2025 from $1,554 million for the three months ended June 30, 2024. Revenue growth was favorably impacted by the settlement of certain copyright infringement cases (the “Copyright Settlement”), which resulted in $16 million higher Recorded Music revenue. The prior-year quarter included $22 million of incremental revenue recognized in Recorded Music from a Digital Service Provider (“DSP”) for performance obligations satisfied in previous periods (the “DSP True-Up Payments”). Recorded Music revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $14 million less Recorded Music revenue compared to the prior-year quarter. The increase in total revenue includes $24 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenue for each of the three months ended June 30, 2025 and June 30, 2024, respectively. Prior to intersegment eliminations, U.S. and international revenues represented 43% and 57% of total revenues for the three months ended June 30, 2025, respectively, and 44% and 56% of total revenues for the three months ended June 30, 2024, respectively.
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Total digital revenues after intersegment eliminations increased by $57 million, or 5%, to $1,132 million for the three months ended June 30, 2025 from $1,075 million for the three months ended June 30, 2024. Total streaming revenue increased by $42 million, driven by growth in Recorded Music and Music Publishing. Total streaming revenue includes $11 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2025 were composed of U.S. revenues of $535 million and international revenues of $598 million, or 47% and 53% of total digital revenues, respectively. Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2024 were composed of U.S. revenues of $504 million and international revenues of $572 million, or 47% and 53% of total digital revenues, respectively.
Recorded Music revenues increased by $103 million, or 8%, to $1,354 million for the three months ended June 30, 2025 from $1,251 million for the three months ended June 30, 2024. The increase includes $21 million of favorable currency exchange fluctuations. U.S. Recorded Music revenues were $536 million and $517 million, or 40% and 41% of consolidated Recorded Music revenues for each of the three months ended June 30, 2025 and June 30, 2024, respectively. International Recorded Music revenues were $818 million and $734 million, or 60% and 59%, of consolidated Recorded Music revenues for each of the three months ended June 30, 2025 and June 30, 2024, respectively.
The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights and licensing revenues, partially offset by a decrease in physical revenue. Digital revenue increased by $47 million, or 5%, which includes a favorable impact of currency exchange fluctuations of $10 million. Revenue from streaming services increased by $32 million to $895 million for the three months ended June 30, 2025 from $863 million for the three months ended June 30, 2024. The increase in streaming revenue was driven by subscription streaming growth and includes a favorable impact of foreign currency exchange rates of $9 million, partially offset by the unfavorable impact of the DSP True-Up Payments and the BMG Termination of $4 million in the prior-year quarter. Download and other digital revenues increased by $15 million, or 79%, to $34 million for the three months ended June 30, 2025 from $19 million for the three months ended June 30, 2024 due to the impact of the Copyright Settlement of $16 million, partially offset by the continued shift to streaming services. Licensing revenue increased by $21 million, or 23%, driven by higher licensing activity primarily in the U.K. and China, and timing of other copyright infringement settlements. Licensing revenue includes a favorable impact of foreign currency exchange rates of $3 million. Artist services and expanded-rights revenue increased by $36 million, or 23%, due to higher concert promotion revenue primarily in France and Spain, and a favorable impact of foreign currency exchange rates of $4 million. Physical revenue, which includes a favorable impact of foreign currency exchange rates of $4 million, decreased by $1 million, or 1%, as growth from strong releases in Korea and Japan was offset by the $10 million impact of the BMG Termination. Top sellers in the quarter included BAEKHYUN, ROSÉ, Bruno Mars, Grateful Dead, and Teddy Swims.
Music Publishing revenues increased by $31 million, or 10%, to $336 million for the three months ended June 30, 2025 from $305 million for the three months ended June 30, 2024. U.S. Music Publishing revenues were $186 million and $161 million, or 55% and 53% of consolidated Music Publishing revenues, for the three months ended June 30, 2025 and June 30, 2024, respectively. International Music Publishing revenues were $150 million and $144 million, or 45% and 47% of consolidated Music Publishing revenues, for the three months ended June 30, 2025 and June 30, 2024, respectively.
The overall increase in Music Publishing revenue was driven by increases in digital, performance, synchronization, and mechanical revenues. Digital revenue increased by $10 million, or 5%, driven by an increase in streaming revenue, which includes a favorable impact of foreign currency exchange rates of $1 million. Revenue from streaming services grew by $10 million, or 5%, to $202 million for the three months ended June 30, 2025 from $192 million for the three months ended June 30, 2024, driven by the impact of digital deal renewals, primarily in the U.S, and a favorable impact of foreign currency exchange rates of $1 million. Performance revenue increased by $6 million, or 12%, driven by growth from concerts, radio and live events primarily in Europe, and a favorable impact of foreign currency exchange rates of $1 million. Mechanical revenue increased by $3 million, or 23%, and includes a favorable impact of foreign currency exchange rates of $1 million. Synchronization revenue increased by $12 million, or 29%, attributable to timing of other copyright infringement settlements, higher television and commercial licensing activity, and the $3 million impact of our acquisition of Tempo.
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Revenue by Geographical Location
U.S. revenue increased by $44 million, or 6%, to $722 million for the three months ended June 30, 2025 from $678 million for the three months ended June 30, 2024. U.S. Recorded Music revenue increased by $19 million, or 4%. U.S. Recorded Music digital revenue increased by $20 million, or 5%, driven by higher download and other digital revenue of $15 million, or 150%, including the impact of the Copyright Settlement in the quarter, and higher streaming revenue of $5 million, or 1%. U.S. Recorded Music licensing revenue increased by $8 million, or 30%, driven by timing of other copyright infringement settlements. U.S. Recorded Music artist services and expanded-rights revenues decreased by $5 million, or 10%, driven by lower merchandising revenue, and physical revenue decreased by $4 million, or 8%. U.S. Music Publishing revenue increased by $25 million, or 16%, to $186 million for the three months ended June 30, 2025 from $161 million for the three months ended June 30, 2024. U.S. Music Publishing digital revenue increased by $11 million, or 10%, attributable to higher streaming revenue of $11 million, or 10%. U.S. Music Publishing streaming revenue reflects impact of digital deal renewals. U.S. Music Publishing performance and mechanical revenues remained constant during the three months ended June 30, 2025 compared to the three months ended June 30, 2024. U.S. Music Publishing synchronization revenue increased by $13 million, or 54%, driven by timing of other copyright infringement settlements, higher television and commercial licensing activity and the impact of acquisitions.
International revenue increased by $90 million, or 10%, to $968 million for the three months ended June 30, 2025 from $878 million for the three months ended June 30, 2024. Excluding the favorable impact of foreign currency exchange rates of $23 million, International revenue increased by $67 million, or 7%. International Recorded Music revenue increased by $84 million, which includes a favorable impact of foreign currency exchange rates of $21 million, driven by growth across digital, artist services and expanded rights, licensing and physical revenues. International Recorded Music licensing revenue increased by $13 million, or 21%, driven by licensing deals primarily in the U.K. and China, and timing of other copyright infringement settlements. International Recorded Music artist services and expanded-rights revenue increased by $41 million, or 37%, driven by higher concert promotion revenue primarily in France and Spain, and the favorable impact of foreign currency exchange rates of $4 million. International Recorded Music digital revenue increased by $27 million, attributable to higher streaming revenue of $27 million, or 6%, which includes the impact of the BMG Termination, and reflects a favorable impact of foreign currency exchange rates of $9 million. Physical revenue increased by $3 million driven by the favorable impact of foreign currency exchange rates of $4 million, partially offset by the impact of the BMG Termination. International Music Publishing revenue increased by $6 million, or 4%, to $150 million for the three months ended June 30, 2025 from $144 million for the three months ended June 30, 2024. International Music Publishing revenue growth was driven by increases in performance revenue of $6 million due to growth from concerts, radio and live events in Europe and mechanical revenue of $3 million. This was partially offset by decreases in digital revenue of $1 million, synchronization revenue of $1 million, and other revenue of $1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Cost of revenues
Our cost of revenues was composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Artist and repertoire costs | $ | 584 |  |  | $ | 548 |  |  | $ | 36 |  |  | 7 | %
Product costs | 329 |  |  | 282 |  |  | 47 |  |  | 17 | %
Total cost of revenues | $ | 913 |  |  | $ | 830 |  |  | $ | 83 |  |  | 10 | %

Artist and repertoire costs increased by $36 million, to $584 million for the three months ended June 30, 2025 from $548 million for the three months ended June 30, 2024. Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the three months ended June 30, 2025 and June 30, 2024.
Product costs increased by $47 million, to $329 million for the three months ended June 30, 2025 from $282 million for the three months ended June 30, 2024. Product costs as a percentage of revenue increased to 19% for the three months ended June 30, 2025 from 18% for the three months ended June 30, 2024 due to revenue and deal mix.
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Selling, general and administrative expenses
Our selling, general and administrative expenses were composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
General and administrative expense (1) | $ | 282 |  |  | $ | 264 |  |  | $ | 18 |  |  | 7 | %
Selling and marketing expense | 167 |  |  | 173 |  |  | (6) |  |  | -3 | %
Distribution expense | 22 |  |  | 25 |  |  | (3) |  |  | -12 | %
Total selling, general and administrative expense | $ | 471 |  |  | $ | 462 |  |  | $ | 9 |  |  | 2 | %

______________________________________
(1)Includes depreciation expense of $29 million and $25 million for the three months ended June 30, 2025 and June 30, 2024, respectively.
Total selling, general and administrative expense increased by $9 million, to $471 million for the three months ended June 30, 2025 from $462 million for the three months ended June 30, 2024. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 28% for the three months ended June 30, 2025 from 30% for the three months ended June 30, 2024 due to the factors noted below.
General and administrative expense increased by $18 million to $282 million for the three months ended June 30, 2025 from $264 million for the three months ended June 30, 2024. The increase in general and administrative expense was driven by incremental investment in technology of $7 million, higher non-cash stock-based compensation costs of $5 million due to the departure of our former Chief Financial Officer (“CFO”) in the current year, the impact of acquisitions of $4 million and higher depreciation expense of $4 million, primarily driven by the core financials component of our new technology platform being placed into service, partially offset by savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business. Expressed as a percentage of revenue, general and administrative expense remained constant at 17% for each of the three months ended June 30, 2025 and June 30, 2024.
Selling and marketing expense decreased by $6 million, or 3%, to $167 million for the three months ended June 30, 2025 from $173 million for the three months ended June 30, 2024. Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the three months ended June 30, 2025 from 11% for the three months ended June 30, 2024 due to savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business.
Distribution expense decreased by $3 million to $22 million for the three months ended June 30, 2025 from $25 million for the three months ended June 30, 2024. Expressed as a percentage of revenue, distribution expense decreased to 1% for the three months ended June 30, 2025 from 2% for the three months ended June 30, 2024.
32

Reconciliation of Net Income Attributable to Warner Music Group Corp. and Operating Income to Consolidated Adjusted OIBDA
As previously described, we use Adjusted OIBDA as our primary measure of financial performance. The following table reconciles operating income to Adjusted OIBDA, and further provides the components from net income attributable to Warner Music Group Corp. to operating income for purposes of the discussion that follows (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Net (loss) income attributable to Warner Music Group Corp. | $ | (16) |  |  | $ | 139 |  |  | $ | (155) |  |  | — | %
Income attributable to noncontrolling interest | — |  |  | 2 |  |  | (2) |  |  | (100) | %
Net (loss) income | (16) |  |  | 141 |  |  | (157) |  |  | — | %
Income tax expense | 5 |  |  | 30 |  |  | (25) |  |  | (83) | %
Net (loss) income before income taxes | (11) |  |  | 171 |  |  | (182) |  |  | — | %
Other expense (income) | 137 |  |  | (4) |  |  | 141 |  |  | — | %
Interest expense, net | 43 |  |  | 40 |  |  | 3 |  |  | 8 | %
Operating income | 169 |  |  | 207 |  |  | (38) |  |  | (18) | %
Amortization expense | 67 |  |  | 55 |  |  | 12 |  |  | 22 | %
Depreciation expense | 29 |  |  | 25 |  |  | 4 |  |  | 16 | %
Restructuring and impairments | 69 |  |  | 1 |  |  | 68 |  |  | — | %
Transformation initiative costs | 19 |  |  | 18 |  |  | 1 |  |  | 6 | %
Executive transition costs | 4 |  |  | — |  |  | 4 |  |  | (100) | %
Net gain on divestitures | — |  |  | (1) |  |  | 1 |  |  | — | %
Non-cash stock-based compensation and other related costs | 16 |  |  | 11 |  |  | 5 |  |  | 45 | %
Adjusted OIBDA | $ | 373 |  |  | $ | 316 |  |  | $ | 57 |  |  | 18 | %

Adjusted OIBDA
Adjusted OIBDA increased by $57 million to $373 million for the three months ended June 30, 2025 from $316 million for the three months ended June 30, 2024, driven by the impact of the Copyright Settlement of $9 million in Recorded Music in the current quarter and the $12 million impact of the DSP True-Up Payments in the prior-year quarter, as well as revenue mix, the impact of acquisitions, and savings from the 2024 Strategic Restructuring Plan, partially offset by the reinvestment of these savings in the Company’s business including $7 million of incremental investment in technology for the three months ended June 30, 2025. Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 22% for the three months ended June 30, 2025 from 20% for the three months ended June 30, 2024.
Non-cash stock-based compensation and other related costs
Our non-cash stock-based compensation and other related costs increased by $5 million to $16 million for the three months ended June 30, 2025 from $11 million for the three months ended June 30, 2024, primarily due to $5 million of costs related to the departure of our former CFO in the current year.
Net gain on divestitures
There was no net gain on divestitures during the three months ended June 30, 2025. Net gain on divestitures during the three months ended June 30, 2024 includes a pre-tax gain of $1 million in connection with the divestiture of certain non-core owned and operated media properties.
33

Executive transition costs
Executive transition costs were $4 million during the three months ended June 30, 2025, which consisted of severance costs associated with the departure of our former CFO in the current year.
Transformation initiative costs
Our transformation initiative costs which include costs associated with our finance transformation increased by $1 million to $19 million for the three months ended June 30, 2025 from $18 million for the three months ended June 30, 2024.
Restructuring and Impairments
Our restructuring and impairment charges increased to $69 million for the three months ended June 30, 2025 from $1 million for the three months ended June 30, 2024. The three months ended June 30, 2025 includes an impairment charge of $70 million for long-lived assets associated with certain of the Company’s non-core e-tailer operations.
Depreciation expense
Our depreciation expense increased by $4 million to $29 million for the three months ended June 30, 2025 from $25 million for the three months ended June 30, 2024. The increase is primarily driven by the core financials component of our new technology platform being placed into service.
Amortization expense
Our amortization expense increased by $12 million, to $67 million for the three months ended June 30, 2025 from $55 million for the three months ended June 30, 2024. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by certain intangible assets becoming fully amortized.
Operating income
Our operating income decreased by $38 million to $169 million for the three months ended June 30, 2025 from $207 million for the three months ended June 30, 2024. In addition to the factors impacting Adjusted OIBDA described above, the decrease in operating income was driven by an increase in restructuring and impairment charges of $68 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, higher amortization expenses of $12 million, higher non-cash stock-based compensation and other related costs of $5 million, and the impact of a $1 million net gain on a divestiture in the prior-year quarter.
Interest expense, net
Our interest expense, net, increased to $43 million for the three months ended June 30, 2025 from $40 million for the three months ended June 30, 2024 due to incremental debt related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo.
Other expense (income)
Other expense for the three months ended June 30, 2025 primarily includes foreign currency losses on our Euro-denominated debt of $70 million, currency exchange losses on our intercompany loans of $63 million, and realized and unrealized losses on hedging activity of $8 million. This compares to foreign currency gains on our Euro-denominated debt of $7 million, currency exchange losses on our intercompany loans of $5 million, and realized and unrealized gains on hedging activity of $1 million for the three months ended June 30, 2024.
Income tax expense
Our income tax expense decreased by $25 million to $5 million for the three months ended June 30, 2025 from $30 million for the three months ended June 30, 2024. The decrease of $25 million in income tax expense is primarily due to the impact of pre-tax loss in the current period and benefit for updated allowable costs for reported foreign derived intangible income in the prior period.
Net (loss) income
Net (loss) income decreased by $157 million to net loss of $16 million for the three months ended June 30, 2025 from net income of $141 million for the three months ended June 30, 2024 as a result of the factors described above.
34

Noncontrolling interest
There was no income attributable to noncontrolling interest during the three months ended June 30, 2025 compared to a loss of $2 million for the three months ended June 30, 2024.
Business Segment Results
Revenues, operating income (loss) and Adjusted OIBDA by business segment were as follows (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Recorded Music |  |  |  |  |  |  |
Revenues | $ | 1,354 |  |  | $ | 1,251 |  |  | $ | 103 |  |  | 8 | %
Operating income | 201 |  |  | 230 |  |  | (29) |  |  | -13 | %
Adjusted OIBDA | 321 |  |  | 281 |  |  | 40 |  |  | 14 | %
Music Publishing |  |  |  |  |  |  |
Revenues | 336 |  |  | 305 |  |  | 31 |  |  | 10 | %
Operating income | 60 |  |  | 53 |  |  | 7 |  |  | 13 | %
Adjusted OIBDA | 96 |  |  | 79 |  |  | 17 |  |  | 22 | %
Corporate expenses and eliminations |  |  |  |  |  |  |
Revenue eliminations | (1) |  |  | (2) |  |  | 1 |  |  | -50 | %
Operating loss | (92) |  |  | (75) |  |  | (17) |  |  | 23 | %
Adjusted OIBDA loss | (44) |  |  | (44) |  |  | — |  |  | — | %
Total |  |  |  |  |  |  |
Revenues | 1,689 |  |  | 1,554 |  |  | 135 |  |  | 9 | %
Operating income | 169 |  |  | 207 |  |  | (38) |  |  | -18 | %
Adjusted OIBDA | 373 |  |  | 316 |  |  | 57 |  |  | 18 | %

Recorded Music
Revenues
Recorded Music revenue increased by $103 million, or 8%, to $1,354 million for the three months ended June 30, 2025 from $1,251 million for the three months ended June 30, 2024.
The overall increase in Recorded Music revenue was driven by higher revenue across digital, artist services and expanded-rights and licensing, partially offset by a decrease in physical revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Recorded Music cost of revenues was composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Artist and repertoire costs | $ | 377 |  |  | $ | 354 |  |  | $ | 23 |  |  | 6 | %
Product costs | 329 |  |  | 282 |  |  | 47 |  |  | 17 | %
Total cost of revenues | $ | 706 |  |  | $ | 636 |  |  | $ | 70 |  |  | 11 | %

Recorded Music cost of revenues increased by $70 million, to $706 million for the three months ended June 30, 2025 from $636 million for the three months ended June 30, 2024. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the three months ended June 30, 2025 and June 30, 2024. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs increased to 24% for the three months ended June 30, 2025 from 23% for the three months ended June 30, 2024, driven by revenue and deal mix.
35

Selling, general and administrative expense
Recorded Music selling, general and administrative expenses were composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
General and administrative expense (1) | $ | 162 |  |  | $ | 161 |  |  | $ | 1 |  |  | 1 | %
Selling and marketing expense | 161 |  |  | 167 |  |  | (6) |  |  | -4 | %
Distribution expense | 22 |  |  | 25 |  |  | (3) |  |  | -12 | %
Total selling, general and administrative expense | $ | 345 |  |  | $ | 353 |  |  | $ | (8) |  |  | -2 | %

______________________________________
(1)Includes depreciation expense of $14 million and $13 million for the three months ended June 30, 2025 and June 30, 2024, respectively.
Recorded Music selling, general and administrative expense decreased by $8 million, to $345 million for the three months ended June 30, 2025 from $353 million for the three months ended June 30, 2024. The increase in general and administrative expense was largely driven by the impact of acquisitions of $4 million, partially offset by lower non-cash stock-based compensation and other related costs of $2 million. The decrease in selling and marketing expense was driven by savings from the 2024 Strategic Restructuring Plan, a portion of which has been reinvested into the Company’s business. The decrease in distribution expense was primarily driven by revenue mix. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 25% for the three months ended June 30, 2025 from 28% for the three months ended June 30, 2024.
Operating Income and Adjusted OIBDA
Recorded Music operating income decreased by $29 million to $201 million for the three months ended June 30, 2025 from $230 million for the three months ended June 30, 2024. In addition to the factors impacting Adjusted OIBDA described below, the decrease in operating income was driven by an increase in restructuring and impairment charges of $67 million compared to the prior-year quarter, which includes an impairment charge of $70 million for long-lived assets associated with certain of the Company’s non-core e-tailer operations, and higher amortization expenses of $3 million related to acquisitions of music-related assets.
Recorded Music Adjusted OIBDA increased by $40 million to $321 million for the three months ended June 30, 2025 from $281 million for the three months ended June 30, 2024, largely driven by the impact of the Copyright Settlement of $9 million in the current quarter and the $12 million impact of the DSP True-Up Payments in the prior-year quarter, as well as savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business, and favorable movements in foreign currency exchange rates. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 24% for the three months ended June 30, 2025 from 22% for the three months ended June 30, 2024 due to the factors noted above.
Music Publishing
Revenues
Music Publishing revenues increased by $31 million, or 10%, to $336 million for the three months ended June 30, 2025 from $305 million for the three months ended June 30, 2024.
The overall increase in Music Publishing revenue was driven by growth in digital, performance, synchronization and mechanical revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Music Publishing cost of revenues were composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Artist and repertoire costs | $ | 208 |  |  | $ | 196 |  |  | $ | 12 |  |  | 6 | %
Total cost of revenues | $ | 208 |  |  | $ | 196 |  |  | $ | 12 |  |  | 6 | %

Music Publishing cost of revenues increased by $12 million, or 6%, to $208 million for the three months ended June 30, 2025 from $196 million for the three months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music
36

Publishing cost of revenues decreased to 62% for the three months ended June 30, 2025 from 64% for the three months ended June 30, 2024, largely due to revenue mix.
Selling, general and administrative expense
Music Publishing selling, general and administrative expenses were composed of the following amounts (in millions):

| For the Three Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
General and administrative expense (1) | $ | 33 |  |  | $ | 30 |  |  | $ | 3 |  |  | 10 | %
Selling and marketing expense | 1 |  |  | 1 |  |  | — |  |  | — | %
Total selling, general and administrative expense | $ | 34 |  |  | $ | 31 |  |  | $ | 3 |  |  | 10 | %

______________________________________
(1)Includes depreciation expense of $1 million for the three months ended June 30, 2025. There was no depreciation expense for the three months ended June 30, 2024.
Music Publishing selling, general and administrative expense increased by $3 million, or 10%, to $34 million for the three months ended June 30, 2025 from $31 million for the three months ended June 30, 2024, driven by higher overhead and the impact of acquisitions. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for the three months ended June 30, 2025 and June 30, 2024.
Operating Income and Adjusted OIBDA
Music Publishing operating income increased by $7 million to $60 million for the three months ended June 30, 2025 from $53 million for the three months ended June 30, 2024, driven by the same factors affecting Adjusted OIBDA discussed below, partially offset by an increase in depreciation and amortization expense of $10 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Music Publishing Adjusted OIBDA increased by $17 million, or 22%, to $96 million for the three months ended June 30, 2025 from $79 million for the three months ended June 30, 2024, primarily driven by revenue mix. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 29% for the three months ended June 30, 2025 from 26% for the three months ended June 30, 2024.
Corporate Expenses and Eliminations
Our operating loss from corporate expenses and eliminations increased by $17 million for the three months ended June 30, 2025 to $92 million from $75 million for the three months ended June 30, 2024, driven by incremental investment in technology and higher depreciation expense of $2 million driven by the core financials component of our new technology platform being placed into service.
Our Adjusted OIBDA loss from corporate expenses and eliminations remained constant at $44 million for each of the three months ended June 30, 2025 and June 30, 2024, primarily due to the operating loss factors noted above.
37

RESULTS OF OPERATIONS
Nine Months Ended June 30, 2025 Compared with Nine Months Ended June 30, 2024
Consolidated Results
Revenues
Our revenues were composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Revenue by Type |  |  |  |  |  |  |
Digital | $ | 2,643 |  |  | $ | 2,638 |  |  | $ | 5 |  |  | — | %
Physical | 397 |  |  | 385 |  |  | 12 |  |  | 3 | %
Total digital and physical | 3,040 |  |  | 3,023 |  |  | 17 |  |  | 1 | %
Artist services and expanded-rights | 508 |  |  | 489 |  |  | 19 |  |  | 4 | %
Licensing | 326 |  |  | 373 |  |  | (47) |  |  | -13 | %
Total Recorded Music | 3,874 |  |  | 3,885 |  |  | (11) |  |  | — | %
Performance | 167 |  |  | 155 |  |  | 12 |  |  | 8 | %
Digital | 599 |  |  | 577 |  |  | 22 |  |  | 4 | %
Mechanical | 46 |  |  | 43 |  |  | 3 |  |  | 7 | %
Synchronization | 142 |  |  | 129 |  |  | 13 |  |  | 10 | %
Other | 15 |  |  | 11 |  |  | 4 |  |  | 36 | %
Total Music Publishing | 969 |  |  | 915 |  |  | 54 |  |  | 6 | %
Intersegment eliminations | (4) |  |  | (4) |  |  | — |  |  | — | %
Total revenues | $ | 4,839 |  |  | $ | 4,796 |  |  | $ | 43 |  |  | 1 | %
Revenue by Geographical Location |  |  |  |  |  |  |
U.S. Recorded Music | $ | 1,565 |  |  | $ | 1,652 |  |  | $ | (87) |  |  | -5 | %
U.S. Music Publishing | 520 |  |  | 503 |  |  | 17 |  |  | 3 | %
Total U.S. | 2,085 |  |  | 2,155 |  |  | (70) |  |  | -3 | %
International Recorded Music | 2,309 |  |  | 2,233 |  |  | 76 |  |  | 3 | %
International Music Publishing | 449 |  |  | 412 |  |  | 37 |  |  | 9 | %
Total international | 2,758 |  |  | 2,645 |  |  | 113 |  |  | 4 | %
Intersegment eliminations | (4) |  |  | (4) |  |  | — |  |  | — | %
Total revenues | $ | 4,839 |  |  | $ | 4,796 |  |  | $ | 43 |  |  | 1 | %

Total Revenues
Total revenues increased by $43 million, or 1%, to $4,839 million for the nine months ended June 30, 2025 from $4,796 million for the nine months ended June 30, 2024. Revenue growth was favorably impacted by $16 million of higher Recorded Music digital revenue from the Copyright Settlement and $4 million of higher Recorded Music digital revenue from the DSP True-Up Payments. The prior year included $75 million in Recorded Music licensing revenue from a licensing agreement extension for an artist’s catalog (the “Licensing Extension”), $43 million of incremental Recorded Music streaming revenue recognized from the DSP True-Up Payments, and $30 million of Recorded Music streaming revenue from a deal with one of the Company’s digital partners (the “Digital License Renewal”), which resulted in upfront revenue recognition for the nine months ended June 30, 2024. Revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $64 million lower Recorded Music revenue compared to the nine months ended June 30, 2024, of which $24 million was in streaming revenue and $40 million was in physical revenue. Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenues for the nine months ended June 30, 2025, respectively, and 81% and 19% of total revenues for the nine months ended June 30, 2024, respectively. Prior to intersegment eliminations, U.S. and international revenues represented 43% and 57% for the nine months ended June 30, 2025, respectively, and 45% and 55% for the nine months ended June 30, 2024, respectively.
Total digital revenues after intersegment eliminations increased by $27 million, or 1%, to $3,241 million for the nine months ended June 30, 2025 from $3,214 million for the nine months ended June 30, 2024. Total streaming revenue increased 1% primarily driven by an increase in streaming revenue at Music Publishing. Total digital revenues remained constant at 67% of consolidated revenues for each of the nine months ended June 30, 2025 and June 30, 2024. Prior to intersegment eliminations, total digital revenues
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for the nine months ended June 30, 2025 were composed of U.S. revenues of $1,533 million and international revenues of $1,709 million, or 47% and 53% of total digital revenues, respectively. Prior to intersegment eliminations, total digital revenues for the nine months ended June 30, 2024 were composed of U.S. revenues of $1,551 million and international revenues of $1,664 million, or 48% and 52% of total digital revenues, respectively.
Recorded Music revenues decreased by $11 million to $3,874 million for the nine months ended June 30, 2025 compared to $3,885 million for the nine months ended June 30, 2024, which includes $17 million of unfavorable currency exchange fluctuations. U.S. Recorded Music revenues were $1,565 million and $1,652 million, or 40% and 43% of consolidated Recorded Music revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively. International Recorded Music revenues were $2,309 million and $2,233 million, or 60% and 57% of consolidated Recorded Music revenues for the nine months ended June 30, 2025 and June 30, 2024, respectively.
The overall decrease in Recorded Music revenue was driven by a decrease in licensing offset by increases in artist services and expanded-rights and physical revenues. Digital revenue increased by $5 million for the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024, which includes an unfavorable impact of currency exchange fluctuations of $20 million, and reflects the impacts of the Copyright Settlement of $16 million and DSP True-Up Payments of $4 million in the current year and $43 million in the prior year, as well as the Digital License Renewal of $30 million and the BMG Termination of $24 million in the prior year. Revenue from streaming services decreased $4 million to $2,574 million for the nine months ended June 30, 2025 compared to $2,578 million for the nine months ended June 30, 2024, which includes the unfavorable impact of foreign currency exchange rates of $20 million, and reflects the impacts of the DSP True-Up Payments of $4 million in the current year and $43 million in the prior year, as well as the Digital License Renewal of $30 million and the BMG Termination of $24 million in the prior year. Download and other digital revenues increased by $9 million, or 15%, to $69 million for the nine months ended June 30, 2025 from $60 million for the nine months ended June 30, 2024 primarily due to the impact of the Copyright Settlement of $16 million, partially offset by the continued shift to streaming services. Licensing revenue decreased by $47 million, or 13%, primarily driven by $75 million from the Licensing Extension in the prior year. Artist services and expanded-rights revenue increased by $19 million, or 4%, attributable to higher concert promotion revenue in Europe. Physical revenue increased by $12 million, or 3%, driven by strong U.S. and international releases, including in Japan and Korea, and includes a favorable impact of foreign currency exchange rates of $2 million, partially offset by the unfavorable impact of the BMG Termination of $40 million. Top sellers for the nine months ended June 30, 2025 included ROSÉ, Bruno Mars, Teddy Swims, Linkin Park, Charli XCX, and Benson Boone.
Music Publishing revenues increased by $54 million, or 6%, to $969 million for the nine months ended June 30, 2025 from $915 million for the nine months ended June 30, 2024. U.S. Music Publishing revenues were $520 million and $503 million, or 54% and 55% of consolidated Music Publishing revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively. International Music Publishing revenues were $449 million and $412 million, or 46% and 45% of Music Publishing revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively.
The overall increase in Music Publishing revenue was attributable to increases in digital revenue of $22 million, or 4%, performance revenue of $12 million, or 8%, synchronization revenue of $13 million, or 8%, mechanical revenue of $3 million, or 7%, and other publishing revenue of $4 million. The increase in digital revenue was primarily driven by continued growth in streaming revenue. Revenue from streaming services grew by $22 million, or 4%, to $592 million for the nine months ended June 30, 2025 from $570 million for the nine months ended June 30, 2024, reflecting the impact of deal renewals, primarily in the U.S., partially offset by an unfavorable impact of foreign currency exchange rates of $2 million. The growth in performance revenue is attributable to growth from concerts, radio and live events in Europe, and the growth in synchronization revenue is attributable to the timing of other copyright infringement settlements, higher television and commercial licensing activity, and the $5 million impact of our acquisition of Tempo.
Revenue by Geographical Location
U.S. revenue decreased by $70 million, or 3%, to $2,085 million for the nine months ended June 30, 2025 from $2,155 million for the nine months ended June 30, 2024. U.S. Recorded Music revenue decreased by $87 million, or 5%, primarily driven by a decrease in licensing revenue of $67 million largely attributable to $75 million from the Licensing Extension in the prior year. The decrease in U.S. Recorded Music revenue was also attributable to lower digital and expanded-rights revenues, partially offset by growth in U.S. Recorded Music physical revenue. U.S. Recorded Music digital revenue decreased by $20 million, or 2%, which reflects lower streaming revenue of $33 million, or 3%, partially offset by higher download and other digital revenue of $13 million, or 42%. The decrease in streaming revenue is largely attributable to the impacts of the DSP True-Up Payments in both the current and prior years, as well as the BMG Termination in the prior year. The increase in download and other digital revenue is due to the impact of the Copyright Settlement of $16 million in the current year. U.S Recorded Music physical revenue increased by $4 million, or 2%, driven by strong releases in the current year as well as catalog and carryover success, partially offset by the impact of the BMG Termination. U.S. Recorded Music artist services and expanded-rights revenue decreased by $4 million, or 3%, driven by a decrease in revenue related to the exit of the Company’s non-core owned and operated media properties in the prior year in connection with the
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2024 Strategic Restructuring Plan, partially offset by the impact of acquisitions. U.S. Music Publishing revenue increased by $17 million, or 3%, to $520 million for the nine months ended June 30, 2025 from $503 million for the nine months ended June 30, 2024. U.S. Music Publishing digital revenue increased by $2 million, attributable to higher streaming revenue of $2 million, or 1%, while download and other digital revenue remained constant. U.S. Music Publishing mechanical revenue increased by $2 million, or 25%. U.S. Music Publishing synchronization revenue increased by $13 million, or 17%, driven by timing of other copyright infringement settlements, higher television and commercial licensing activity and the impact of acquisitions. U.S. Music Publishing performance revenue remained constant for the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024.
International revenue increased by $113 million, or 4%, to $2,758 million for the nine months ended June 30, 2025 from $2,645 million for the nine months ended June 30, 2024. Excluding the unfavorable impact of foreign currency exchange rates of $22 million, International revenue increased by $135 million, or 5%. International Recorded Music revenue increased by $76 million, driven by increases in digital revenue of $25 million, artist services and expanded-rights revenue of $23 million, licensing revenue of $20 million and physical revenue of $8 million. International Recorded Music digital revenue increased by $25 million, attributable to higher streaming revenue of $29 million which includes the impact of certain DSP True-Up Payments, the Digital License Renewal and the BMG Termination in the prior year, and a favorable impact of foreign currency exchange rates of $20 million, partially offset by lower download and other digital revenue of $4 million. International Recorded Music artist services and expanded-rights revenue increased by $23 million, primarily due to higher concert promotion revenue. International Recorded Music licensing revenue increased by $20 million, driven by higher licensing activity primarily in the U.K. and Japan, the timing of other copyright infringement settlements, and favorable foreign currency exchange rates of $1 million. International Recorded Music physical revenue increased by $8 million, driven by strength of new releases primarily in Japan, and a favorable impact of foreign currency exchange rates of $2 million, partially offset by the unfavorable impact of the BMG Termination in the prior year. International Music Publishing revenue increased by $37 million, or 9%, to $449 million for the nine months ended June 30, 2025 from $412 million for the nine months ended June 30, 2024. This was driven by increases in digital revenue of $20 million, performance revenue of $12 million driven by higher touring revenue, mechanical revenue of $1 million, and other publishing revenue of $4 million. Synchronization revenue remained constant for the nine months ended June 30, 2025 compared to the nine months ended June 30, 2024. International Music Publishing digital growth is primarily driven by streaming revenue growth of $20 million, or 9%.
Cost of revenues
Our cost of revenues was composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Artist and repertoire costs | $ | 1,689 |  |  | $ | 1,627 |  |  | $ | 62 |  |  | 4 | %
Product costs | 909 |  |  | 874 |  |  | 35 |  |  | 4 | %
Total cost of revenues | $ | 2,598 |  |  | $ | 2,501 |  |  | $ | 97 |  |  | 4 | %

Artist and repertoire costs increased by $62 million, to $1,689 million for the nine months ended June 30, 2025 from $1,627 million for the nine months ended June 30, 2024. Artist and repertoire costs as a percentage of revenue increased to 35% for the nine months ended June 30, 2025 from 34% for the nine months ended June 30, 2024, primarily due to revenue mix compared to the nine months ended June 30, 2024, which included items with upfront revenue recognition without associated artist and repertoire costs, partially offset by favorable movements in currency exchange rates.
Product costs increased by $35 million, to $909 million for the nine months ended June 30, 2025 from $874 million for the nine months ended June 30, 2024. Product costs as a percentage of revenue increased to 19% for the nine months ended June 30, 2025 from 18% for the nine months ended June 30, 2024, primarily due to the impact of the Licensing Extension, revenue mix and the BMG Termination.
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Selling, general and administrative expenses
Our selling, general and administrative expenses were composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
General and administrative expense (1) | $ | 842 |  |  | $ | 791 |  |  | $ | 51 |  |  | 6 | %
Selling and marketing expense | 482 |  |  | 518 |  |  | (36) |  |  | -7 | %
Distribution expense | 71 |  |  | 75 |  |  | (4) |  |  | -5 | %
Total selling, general and administrative expense | $ | 1,395 |  |  | $ | 1,384 |  |  | $ | 11 |  |  | 1 | %

______________________________________
(1)Includes depreciation expense of $86 million and $77 million for the nine months ended June 30, 2025 and June 30, 2024, respectively.
Total selling, general and administrative expense increased by $11 million, to $1,395 million for the nine months ended June 30, 2025 from $1,384 million for the nine months ended June 30, 2024. Expressed as a percentage of revenue, total selling, general and administrative expense remained constant at 29% for each of the nine months ended June 30, 2025 and June 30, 2024 due to the factors noted below.
General and administrative expense increased by $51 million to $842 million for the nine months ended June 30, 2025 from $791 million for the nine months ended June 30, 2024. The increase in general and administrative expense was driven by incremental investment in technology of $20 million, higher non-cash stock-based compensation expense of $14 million, the impact of acquisitions of $7 million, and higher depreciation expense of $9 million related to technology assets being placed into service, including the core financials component of our new technology platform, partially offset by lower expenses related to transformation initiatives and related costs of $2 million, and savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested into the Company’s business. Expressed as a percentage of revenue, general and administrative expense increased to 17% for the nine months ended June 30, 2025 from 16% for the nine months ended June 30, 2024 due to the factors noted above.
Selling and marketing expense decreased by $36 million, or 7%, to $482 million for the nine months ended June 30, 2025 from $518 million for the nine months ended June 30, 2024. Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the nine months ended June 30, 2025, from 11% for the nine months ended June 30, 2024 due to lower variable marketing spend and savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business.
Distribution expense decreased by $4 million to $71 million for the nine months ended June 30, 2025 from $75 million for the nine months ended June 30, 2024. Expressed as a percentage of revenue, distribution expense decreased to 1% for the nine months ended June 30, 2025 from 2% for the nine months ended June 30, 2024.
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Reconciliation of Net Income Attributable to Warner Music Group Corp. and Operating Income to Consolidated Adjusted OIBDA
As previously described, we use Adjusted OIBDA as our primary measure of financial performance. The following table reconciles operating income to Adjusted OIBDA, and further provides the components from net income attributable to Warner Music Group Corp. to operating income for purposes of the discussion that follows (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Net income attributable to Warner Music Group Corp. | $ | 256 |  |  | $ | 394 |  |  | $ | (138) |  |  | -35 | %
Income attributable to noncontrolling interest | 5 |  |  | 36 |  |  | (31) |  |  | -86 | %
Net income | 261 |  |  | 430 |  |  | (169) |  |  | -39 | %
Income tax expense | 123 |  |  | 120 |  |  | 3 |  |  | 3 | %
Income before income taxes | 384 |  |  | 550 |  |  | (166) |  |  | -30 | %
Other expense | 48 |  |  | 9 |  |  | 39 |  |  | — | %
Interest expense, net | 119 |  |  | 121 |  |  | (2) |  |  | -2 | %
Operating income | 551 |  |  | 680 |  |  | (129) |  |  | -19 | %
Amortization expense | 186 |  |  | 167 |  |  | 19 |  |  | 11 | %
Depreciation expense | 86 |  |  | 77 |  |  | 9 |  |  | 12 | %
Restructuring and impairments | 109 |  |  | 96 |  |  | 13 |  |  | 14 | %
Transformation initiatives and other related costs | 54 |  |  | 56 |  |  | (2) |  |  | -4 | %
Executive transition costs | 4 |  |  | — |  |  | 4 |  |  | — | %
Net gain on divestitures | — |  |  | (32) |  |  | 32 |  |  | -100 | %
Non-cash stock-based compensation and other related costs | 49 |  |  | 35 |  |  | 14 |  |  | 40 | %
Adjusted OIBDA | $ | 1,039 |  |  | $ | 1,079 |  |  | $ | (40) |  |  | -4 | %

Adjusted OIBDA
Adjusted OIBDA decreased by $40 million to $1,039 million for the nine months ended June 30, 2025 as compared to $1,079 million for the nine months ended June 30, 2024, largely attributable to the impact of the Copyright Settlement of $9 million in Recorded Music and the $3 million impact of the DSP True-Up Payments in the current year, and the $74 million impact of the Licensing Extension, the $23 million impact of the DSP True-Up Payments, the $12 million impact of the Digital License Renewal, and the $1 million impact of the BMG Termination in the prior year, as well as revenue mix, partially offset by savings from the 2024 Strategic Restructuring Plan, a portion of which has been reinvested in the Company’s business, and favorable movements in currency exchange rates. Expressed as a percentage of total revenue, Adjusted OIBDA margin decreased to 21% for the nine months ended June 30, 2025 from 23% for the nine months ended June 30, 2024.
Non-cash stock-based compensation and other related costs
Our non-cash stock-based compensation and other related costs increased by $14 million to $49 million for the nine months ended June 30, 2025 from $35 million for the nine months ended June 30, 2024, primarily related to issuance of additional restricted stock units and market-based performance stock units and the departure of our former CFO in the current year of $5 million.
Net gain on divestitures
There was no net gain on divestitures during the nine months ended June 30, 2025. During the nine months ended June 30, 2024, the Company recognized a pre-tax gain of $32 million in connection with the divestiture of certain sound recording and publishing rights.
Executive transition costs
Executive transition costs were $4 million during the nine months ended June 30, 2025, which consisted of severance costs associated with the departure of our former CFO in the current year.
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Transformation initiatives and other related costs
Our transformation initiatives and other related costs decreased by $2 million to $54 million for the nine months ended June 30, 2025 from $56 million for the nine months ended June 30, 2024.
Restructuring and Impairments
Our restructuring and impairment charges increased by $13 million to $109 million for the nine months ended June 30, 2025 from $96 million for the nine months ended June 30, 2024. The current year includes contract termination costs of approximately $7 million, and approximately $32 million of impairment losses related to the 2024 Strategic Restructuring Plan as well as an impairment charge of $70 million for long-lived assets associated with certain of the Company’s non-core e-tailer operations. Impairment charges recognized in connection with the 2024 Strategic Restructuring Plan during the current year primarily relate to the write-off of certain long-form audiovisual production assets and lease termination costs for office closures. The nine months ended June 30, 2024 also includes severance costs of approximately $46 million, and $50 million of impairment losses primarily related to the 2024 Strategic Restructuring Plan.
Depreciation expense
Our depreciation expense increased by $9 million to $86 million for the nine months ended June 30, 2025 from $77 million for the nine months ended June 30, 2024. This increase is primarily due to an increase in IT assets being placed into service, including the core financials component of our new technology platform.
Amortization expense
Our amortization expense increased by $19 million, or 11%, to $186 million for the nine months ended June 30, 2025 from $167 million for the nine months ended June 30, 2024. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by certain intangible assets becoming fully amortized.
Operating income
Our operating income decreased by $129 million to $551 million for the nine months ended June 30, 2025 from $680 million for the nine months ended June 30, 2024. The decrease in operating income was due to the same factors affecting Adjusted OIBDA discussed above, as well as higher depreciation expenses primarily due to an increase in technology assets being placed into service, including the core financials component of our new technology platform, a $32 million net gain on divestitures in the prior year and higher restructuring and impairment charges as noted above.
Interest expense, net
Our interest expense, net, decreased to $119 million for the nine months ended June 30, 2025 from $121 million for the nine months ended June 30, 2024 due to lower interest rates on variable rate debt, partially offset by the impact of the Tempo Asset-Based Notes.
Other expense
Other expense for the nine months ended June 30, 2025 primarily includes foreign currency losses on our Euro-denominated debt of $43 million, currency exchange gains on our intercompany loans of $43 million, realized gains on the sale of an investment of $29 million, and realized and unrealized gains on hedging activity of $1 million. This compares to foreign currency losses on our Euro-denominated debt of $19 million and currency exchange losses on the Company’s intercompany loans of $2 million for the nine months ended June 30, 2024.
Income tax expense
Our income tax expense increased by $3 million to $123 million for the nine months ended June 30, 2025 from $120 million for the nine months ended June 30, 2024. The increase of $3 million in income tax expense is primarily due to benefits in the prior year from the winding down of the Company’s owned and operated media properties, updated allowable costs for reported foreign derived intangible income, and no tax on non-controlling interest were partially offset by lower pre-tax income in the current year.
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Net income
Net income decreased by $169 million to $261 million for the nine months ended June 30, 2025 from $430 million for the nine months ended June 30, 2024 as a result of the factors described above.
Noncontrolling interest
Income attributable to noncontrolling interest decreased by $31 million to $5 million for the nine months ended June 30, 2025 from $36 million for the nine months ended June 30, 2024, driven by lower income from non-wholly-owned subsidiaries in the current year, primarily due to the impact of the Licensing Extension in the prior year.
Business Segment Results
Revenues, operating income (loss) and Adjusted OIBDA by business segment were as follows (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Recorded Music |  |  |  |  |  |  |
Revenues | $ | 3,874 |  |  | $ | 3,885 |  |  | $ | (11) |  |  | — | %
Operating income | 642 |  |  | 739 |  |  | (97) |  |  | -13 | %
Adjusted OIBDA | 914 |  |  | 965 |  |  | (51) |  |  | -5 | %
Music Publishing |  |  |  |  |  |  |
Revenues | $ | 969 |  |  | $ | 915 |  |  | $ | 54 |  |  | 6 | %
Operating income | 167 |  |  | 185 |  |  | (18) |  |  | -10 | %
Adjusted OIBDA | 264 |  |  | 247 |  |  | 17 |  |  | 7 | %
Corporate expenses and eliminations |  |  |  |  |  |  |
Revenue eliminations | $ | (4) |  |  | $ | (4) |  |  | $ | — |  |  | — | %
Operating loss | (258) |  |  | (244) |  |  | (14) |  |  | 6 | %
Adjusted OIBDA loss | (139) |  |  | (133) |  |  | (6) |  |  | 5 | %
Total |  |  |  |  |  |  |
Revenues | $ | 4,839 |  |  | $ | 4,796 |  |  | $ | 43 |  |  | 1 | %
Operating income | 551 |  |  | 680 |  |  | (129) |  |  | -19 | %
Adjusted OIBDA | 1,039 |  |  | 1,079 |  |  | (40) |  |  | -4 | %

Recorded Music
Revenues
Recorded Music revenues decreased by $11 million to $3,874 million for the nine months ended June 30, 2025 compared to $3,885 million for the nine months ended June 30, 2024, U.S. Recorded Music revenues were $1,565 million and $1,652 million, or 40% and 43% of consolidated Recorded Music revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively. International Recorded Music revenues were $2,309 million and $2,233 million, or 60% and 57% of consolidated Recorded Music revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively.
The overall decrease in Recorded Music revenue was driven by a decrease in licensing revenue, offset by increases in artist services and expanded-rights and physical revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
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Cost of revenues
Recorded Music cost of revenues was composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Artist and repertoire costs | $ | 1,082 |  |  | $ | 1,050 |  |  | $ | 32 |  |  | 3 | %
Product costs | 909 |  |  | 874 |  |  | 35 |  |  | 4 | %
Total cost of revenues | $ | 1,991 |  |  | $ | 1,924 |  |  | $ | 67 |  |  | 3 | %

Recorded Music cost of revenues increased by $67 million, to $1,991 million for the nine months ended June 30, 2025 from $1,924 million for the nine months ended June 30, 2024. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs increased to 28% for the nine months ended June 30, 2025, from 27% for the nine months ended June 30, 2024 primarily driven by revenue mix compared to the nine months ended June 30, 2024, which included items with upfront revenue recognition without associated artist and repertoire costs, partially offset by favorable movements in currency exchange rates. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs increased to 23% for the nine months ended June 30, 2025 from 22% for the nine months ended June 30, 2024, primarily due to revenue and deal mix and the impact of the Licensing Extension in the prior year, partially offset by a favorable impact of foreign currency exchange rates in the current year.
Selling, general and administrative expense
Recorded Music selling, general and administrative expenses were composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
General and administrative expense (1) | $ | 503 |  |  | $ | 479 |  |  | $ | 24 |  |  | 5 | %
Selling and marketing expense | 461 |  |  | 500 |  |  | (39) |  |  | -8 | %
Distribution expense | 71 |  |  | 75 |  |  | (4) |  |  | -5 | %
Total selling, general and administrative expense | $ | 1,035 |  |  | $ | 1,054 |  |  | $ | (19) |  |  | -2 | %

______________________________________
(1)Includes depreciation expense of $42 million and $39 million for the nine months ended June 30, 2025 and June 30, 2024, respectively.
Recorded Music selling, general and administrative expense decreased by $19 million, to $1,035 million for the nine months ended June 30, 2025 from $1,054 million for the nine months ended June 30, 2024. The increase in general and administrative expense was primarily due to higher non-cash stock-based compensation and other related expenses of $5 million, partially offset by the impact of acquisitions of $7 million and savings from the 2024 Strategic Restructuring Plan, a portion of which has been reinvested into the Company’s business. The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the 2024 Strategic Restructuring Plan. The decrease in distribution expense was primarily due to revenue mix. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense remained constant at 27% for each of the nine months ended June 30, 2025 and June 30, 2024.
Operating Income and Adjusted OIBDA
Recorded Music operating income decreased by $97 million to $642 million for the nine months ended June 30, 2025 from $739 million for the nine months ended June 30, 2024. In addition to the factors impacting Recorded Music Adjusted OIBDA noted below, the decrease in operating income was driven by a $17 million net gain on divestitures recognized in the prior year, $110 million of restructuring and non-cash impairment charges compared to $89 million recognized in the prior year, primarily related to an impairment charge of $70 million recognized in the current period for long-lived assets associated with certain of the Company’s non-core e-tailer operations offset with lower non-cash impairment charges recognized in connection with the 2024 Strategic Restructuring plan, higher non-cash stock-based compensation expense and other related costs of $5 million and higher depreciation expense of $3 million primarily due to an increase in IT assets being placed into service, including the core financials component of our new technology platform.
Recorded Music Adjusted OIBDA decreased by $51 million, to $914 million for the nine months ended June 30, 2025 from $965 million for the nine months ended June 30, 2024, largely attributable to the impact of the Copyright Settlement of $9 million and the $3 million impact of the DSP True-Up Payments in the current year, as well as the Licensing Extension of $74 million, the $23 million impact of the DSP True-up Payments, the Digital License Renewal of $12 million, and the $1 million impact of the BMG
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Termination in the prior year, partially offset by the impact of favorable movements in foreign currency exchange rates and savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin decreased to 24% for the nine months ended June 30, 2025 from 25% for the nine months ended June 30, 2024, due to the factors noted above.
Music Publishing
Revenues
Music Publishing revenues increased by $54 million, or 6%, to $969 million for the nine months ended June 30, 2025 from $915 million for the nine months ended June 30, 2024. U.S. Music Publishing revenues were $520 million and $503 million, or 54% and 55% of consolidated Music Publishing revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively. International Music Publishing revenues were $449 million and $412 million, or 46% and 45% of consolidated Music Publishing revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively.
The overall increase in Music Publishing revenue was driven by growth across digital, performance, synchronization, mechanical and other publishing revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Music Publishing cost of revenues were composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
Artist and repertoire costs | $ | 612 |  |  | $ | 582 |  |  | $ | 30 |  |  | 5 | %
Total cost of revenues | $ | 612 |  |  | $ | 582 |  |  | $ | 30 |  |  | 5 | %

Music Publishing cost of revenues increased by $30 million, or 5%, to $612 million for the nine months ended June 30, 2025 from $582 million for the nine months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues decreased to 63% for the nine months ended June 30, 2025 from 64% for the nine months ended June 30, 2024.
Selling, general and administrative expense
Music Publishing selling, general and administrative expenses were composed of the following amounts (in millions):

| For the Nine Months Ended June 30, |  | 2025 vs. 2024
| 2025 |  | 2024 |  | $ Change |  | % Change
General and administrative expense (1) | $ | 98 |  |  | $ | 90 |  |  | $ | 8 |  |  | 9 | %
Selling and marketing expense | 3 |  |  | 1 |  |  | 2 |  |  | — | %
Total selling, general and administrative expense | $ | 101 |  |  | $ | 91 |  |  | $ | 10 |  |  | 11 | %

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(1)Includes depreciation expense of $4 million and $2 million for the nine months ended June 30, 2025 and June 30, 2024, respectively.
Music Publishing selling, general and administrative expense increased to $101 million for the nine months ended June 30, 2025 from $91 million for the nine months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for the nine months ended June 30, 2025 and June 30, 2024.
Operating Income and Adjusted OIBDA
Music Publishing operating income decreased by $18 million to $167 million for the nine months ended June 30, 2025 from $185 million operating income for the nine months ended June 30, 2024 largely due to the factors that impacted Music Publishing Adjusted OIBDA noted below, as well as a $14 million net gain on a divestiture recognized in the prior year.
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Music Publishing Adjusted OIBDA increased by $17 million to $264 million for the nine months ended June 30, 2025 from $247 million for the nine months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 27% for the nine months ended June 30, 2025 and June 30, 2024, primarily driven by revenue mix and the impact of acquisitions.
Corporate Expenses and Eliminations
Our operating loss from corporate expenses and eliminations increased by $14 million to $258 million for the nine months ended June 30, 2025 from $244 million for the nine months ended June 30, 2024, primarily due to incremental investment in technology of $20 million compared to the prior year, higher non-cash stock-based compensation and other related expenses of $8 million, executive transition costs of $4 million and higher depreciation expense of $4 million, partially offset by lower expenses related to transformation initiatives and related costs of $2 million and lower restructuring and impairment charges associated with the 2024 Strategic Restructuring Plan.
Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $6 million to $139 million for the nine months ended June 30, 2025 from $133 million for the nine months ended June 30, 2024 primarily due to the operating loss factors noted above.
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FINANCIAL CONDITION AND LIQUIDITY
Financial Condition at June 30, 2025
At June 30, 2025, we had $4.363 billion of debt (which is net of $38 million of premiums, discounts and deferred financing costs), $527 million of cash and equivalents (net debt of $3.836 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $589 million of Warner Music Group Corp. equity. This compares to $4.014 billion of debt (which is net of $34 million of premiums, discounts and deferred financing costs), $694 million of cash and equivalents (net debt of $3.320 billion) and $518 million of Warner Music Group Corp. equity at September 30, 2024.
Cash Flows
The following table summarizes our historical cash flows (in millions). The financial data for the nine months ended June 30, 2025 and June 30, 2024 are unaudited and have been derived from our condensed consolidated interim financial statements included elsewhere herein.

| Nine Months Ended June 30,
| 2025 |  | 2024
Cash provided by (used in): |  |  |
Operating activities | $ | 447 |  |  | $ | 450 |
Investing activities | (273) |  |  | (201) |
Financing activities | (344) |  |  | (280) |

Operating Activities
Cash provided by operating activities was $447 million for the nine months ended June 30, 2025 as compared with cash provided by operating activities of $450 million for the nine months ended June 30, 2024. The $3 million decrease in cash provided by operating activities was largely a result of movement within working capital.
Investing Activities
Cash used in investing activities was $273 million for the nine months ended June 30, 2025 as compared with cash used in investing activities of $201 million for the nine months ended June 30, 2024. The $273 million of cash used in investing activities in the nine months ended June 30, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $152 million to acquire music-related assets and $111 million relating to capital expenditures, partially offset by $36 million of proceeds from the sale of investments. The $201 million of cash used in investing activities in the nine months ended June 30, 2024 consisted of $26 million relating to investments and acquisitions of businesses, $123 million to acquire music-related assets, and $83 million relating to capital expenditures, partially offset by $19 million of proceeds from divestitures and $12 million of proceeds from the sale of investments.
Financing Activities
Cash used in financing activities was $344 million for the nine months ended June 30, 2025 as compared with cash used in financing activities of $280 million for the nine months ended June 30, 2024. The $344 million of cash used in financing activities for the nine months ended June 30, 2025 consisted of dividends paid of $283 million, payment of deferred consideration of $23 million, distributions to noncontrolling interest holders of $8 million, taxes paid related to net share settlement of restricted stock units and common stock of $19 million, common stock repurchased and retired of $3 million, repayment of the Term Loan Mortgage of $1 million and other financing activity of $7 million. The $280 million of cash used in financing activities for the nine months ended June 30, 2024 consisted of dividends paid of $267 million and distributions to noncontrolling interest holders of $6 million, taxes paid related to net share settlement of restricted stock units and common stock of $5 million and deferred financing costs paid of $2 million.
Liquidity
Our primary sources of liquidity are the cash flows generated from our subsidiaries’ operations, available cash and equivalents and funds available for drawing under our Revolving Credit Facility. These sources of liquidity are needed to fund our debt service requirements, working capital requirements, capital expenditure requirements, strategic acquisitions and investments, and dividends, prepayments of debt, repurchases or retirement of our outstanding debt or notes or repurchases of our outstanding equity securities in open market purchases, privately negotiated purchases or otherwise, we may elect to pay or make in the future. We maintain our cash in various banks and other financial institutions around the world, and in some cases those cash deposits are in
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excess of FDIC or other deposit insurance. In the event of a bank failure or receivership, we may not have access to those cash deposits in excess of the relevant deposit insurance, which could have an adverse effect on our liquidity and financial performance.
We believe that our primary sources of liquidity will be sufficient to support our existing operations over the next twelve months.
Debt Capital Structure
Since Access acquired us in 2011, we have sought to extend the maturity dates on our outstanding indebtedness, reduce interest expense and improve our debt ratings. For example, our S&P corporate credit rating improved from B in 2017 to BBB- in August 2024 with a stable outlook, and our Moody’s corporate family rating improved from B1 in 2016 to Ba1 in March 2025 with a positive outlook updated in March 2025. In September 2024, Fitch assigned us a BBB- long-term credit rating with a stable outlook. In addition, our weighted-average interest rate on our outstanding indebtedness has decreased from 10.5% in 2011 to 4.1% as of June 30, 2025. Our nearest-term maturity date is in 2028. Subject to market conditions, we expect to continue to take opportunistic steps to extend our maturity dates and reduce related interest expense. From time to time, we may incur additional indebtedness for, among other things, working capital, repurchasing, redeeming or tendering for existing indebtedness and acquisitions or other strategic transactions.
Repurchase Program
On November 14, 2024, the Company’s board of directors authorized a new $100 million share repurchase program (the “Share Repurchase Program”), which is intended to offset dilution from the Omnibus Incentive Plan. The $100 million share repurchase authorization does not obligate the Company to purchase any shares and the Share Repurchase Program does not have a fixed expiration date. As of June 30, 2025, approximately $97 million of the $100 million share repurchase authorization remained available.
The Company repurchased and retired 20,000 shares for $1 million during the three months ended June 30, 2025. The Company repurchased and retired 80,383 shares for $3 million during the nine months ended June 30, 2025.
Existing Debt as of June 30, 2025
As of June 30, 2025, our long-term debt was as follows (in millions):

Revolving Credit Facility (a) | $ | — |
Senior Term Loan Facility due 2031 | 1,295 |
2.750% Senior Secured Notes due 2028 | 381 |
3.750% Senior Secured Notes due 2029 | 540 |
3.875% Senior Secured Notes due 2030 | 535 |
2.250% Senior Secured Notes due 2031 | 522 |
3.000% Senior Secured Notes due 2031 | 800 |
Mortgage Term Loan due 2033 | 17 |
Total debt, including the current portion | 4,090 |
Premium less unamortized discount and unamortized DFCs | (29) |
Total Acquisition Corp. long-term debt, including the current portion, net | $ | 4,061 |
Tempo Asset-Based Notes due 2050 | 311 |
Unamortized discount | (9) |
Total asset-based long-term debt, including the current portion, net (b) | $ | 302 |
Total long-term debt, including the current portion, net | $ | 4,363 |

______________________________________
(a)Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2025. There were no loan outstanding under the Revolving Credit Facility at June 30, 2025.
(b)The Asset-Based Notes are secured only by certain music rights owned by Tempo and are nonrecourse to the Company and its subsidiaries, other than Tempo.
For further discussion of our debt agreements, see “Liquidity” in the “Financial Condition and Liquidity” section of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
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Dividends
The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating.
The Company intends to pay quarterly cash dividends to holders of its Class A Common Stock and Class B Common Stock. The declaration of each dividend will continue to be at the discretion of the Company’s board of directors and will depend on the Company’s financial condition, earnings, liquidity and capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and any other factors that the Company’s board of directors deems relevant in making such a determination. Therefore, there can be no assurance that the Company will pay any dividends to holders of the Company’s common stock, or as to the amount of any such dividends.
On May 16, 2025, the Company’s board of directors declared a cash dividend of $0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on June 3, 2025. The Company paid an aggregate of approximately $94 million and $283 million, or $0.18 and $0.54 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2025, respectively.
On August 7, 2025, the Company’s board of directors declared a cash dividend of $0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on September 3, 2025 to stockholders of record as of the close of business on August 20, 2025.
Covenant Compliance
The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of June 30, 2025.
On January 18, 2019, we delivered a notice to the trustee under the 2012 Secured Indenture and 2014 Unsecured Indenture changing the Fixed GAAP Date, as defined under the indentures, to October 1, 2018. Under the Senior Term Loan Facility, the Revolving Credit Facility and the Secured Notes Indenture, the Fixed GAAP Date is set for April 3, 2020, other than in respect of capital leases, which are frozen at November 1, 2012.
The Revolving Credit Facility contains a springing leverage ratio that is tied to a ratio based on EBITDA, which is defined under the Revolving Credit Agreement. Our ability to borrow funds under the Revolving Credit Facility may depend upon our ability to meet the leverage ratio test at the end of a fiscal quarter to the extent we have drawn a certain amount of revolving loans. On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein. EBITDA as defined in the Revolving Credit Facility is based on Consolidated Net Income (as defined in the Revolving Credit Facility), both of which terms differ from the terms “EBITDA” and “net income” as they are commonly used. For example, the calculation of EBITDA under the Revolving Credit Facility, in addition to adjusting net income to exclude interest expense, income taxes and depreciation and amortization, also adjusts net income by excluding items or expenses such as, among other items, (1) the amount of any restructuring charges or reserves; (2) any non-cash charges (including any impairment charges); (3) any net loss resulting from hedging currency exchange risks; (4) the amount of management, monitoring, consulting and advisory fees paid to Access; (5) business optimization expenses (including consolidation initiatives, severance costs and other costs relating to initiatives aimed at profitability improvement); (6) transaction expenses; (7) equity-based compensation expense; and (8) certain extraordinary, unusual or non-recurring items. The definition of EBITDA under the Revolving Credit Facility also includes adjustments for the pro forma impact of certain projected cost savings, operating expense reductions and synergies and any quality of earnings analysis prepared by independent certified public accountants in connection with an acquisition, merger, consolidation or other investment. The Senior Term Loan Facility and the Secured Notes Indenture use financial measures called “Consolidated EBITDA” or “EBITDA” and “Consolidated Net Income” that have substantially the same definitions to EBITDA and Consolidated Net Income, each as defined under the Revolving Credit Agreement.
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EBITDA as defined in the Revolving Credit Facility (referred to in this section as “Adjusted EBITDA”) is presented herein because it is a material component of the leverage ratio contained in the Revolving Credit Agreement. Non-compliance with the leverage ratio could result in the inability to use the Revolving Credit Facility, which could have a material adverse effect on our results of operations, financial position and cash flow. Adjusted EBITDA does not represent net income or cash from operating activities as those terms are defined by U.S. GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. While Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters that we may consider not to be indicative of our ongoing operations. In particular, the definition of Adjusted EBITDA in the Revolving Credit Agreement allows us to add back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income. However, these are expenses that may recur, vary greatly and are difficult to predict.
Adjusted EBITDA as presented below should not be used by investors as an indicator of performance for any future period. Further, our debt instruments require that it be calculated for the most recent four fiscal quarters. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year. In addition, our debt instruments require that the leverage ratio be calculated on a pro forma basis for certain transactions including acquisitions as if such transactions had occurred on the first date of the measurement period and may include expected cost savings and synergies resulting from or related to any such transaction. There can be no assurances that any such cost savings or synergies will be achieved in full.
In addition, Adjusted EBITDA is a key measure used by our management to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of those limitations include: (1) it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue for our business; (2) it does not reflect the significant interest expense or cash requirements necessary to service interest or principal payments on our indebtedness; and (3) it does not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments. In particular, this measure adds back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income; however, these are expenses that may recur, vary greatly and are difficult to predict. In addition, Adjusted EBITDA is not the same as net income or cash flow provided by operating activities as those terms are defined by U.S. GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. Accordingly, Adjusted EBITDA should be considered in addition to, not as a substitute for, net income (loss) and other measures of financial performance reported in accordance with U.S. GAAP.
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The following is a reconciliation of net income (loss), which is a U.S. GAAP measure of our operating results, to Adjusted EBITDA as defined, for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2025, for the twelve months ended June 30, 2024 and for the three months ended June 30, 2025 and June 30, 2024. In addition, the reconciliation includes the calculation of the Senior Secured Indebtedness to Adjusted EBITDA ratio, which we refer to as the Leverage Ratio, under the Revolving Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2025. The terms and related calculations are defined in the Revolving Credit Agreement. All amounts in the reconciliation below reflect Acquisition Corp. (in millions, except ratios):

| Twelve Months Ended June 30, |  | Three Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Net Income (loss) | $ | 309 |  |  | $ | 584 |  |  | $ | (16) |  |  | $ | 141 |
Income tax expense | 126 |  |  | 178 |  |  | 5 |  |  | 30 |
Interest expense, net | 159 |  |  | 157 |  |  | 43 |  |  | 40 |
Depreciation and amortization | 355 |  |  | 323 |  |  | 96 |  |  | 80 |
Net gains on divestitures and sale of securities | (29) |  |  | (42) |  |  | — |  |  | (1) |
Restructuring costs (a) | 96 |  |  | 61 |  |  | 3 |  |  | 2 |
Net foreign exchange losses (gains) (b) | 140 |  |  | (17) |  |  | 142 |  |  | (2) |
Transaction costs | 6 |  |  | 8 |  |  | 3 |  |  | 2 |
Business optimization expenses (c) | 96 |  |  | 98 |  |  | 23 |  |  | 27 |
Non-cash stock-based compensation expense (d) | 67 |  |  | 35 |  |  | 16 |  |  | 10 |
Other non-cash charges (e) | 102 |  |  | 56 |  |  | 72 |  |  | 1 |
Unrestricted subsidiary income (loss) | (10) |  |  | — |  |  | (6) |  |  | — |
Pro forma impact of cost savings initiatives and specified transactions (f) | 302 |  |  | 113 |  |  | 75 |  |  | 22 |
Adjusted EBITDA | $ | 1,719 |  |  | $ | 1,554 |  |  | $ | 456 |  |  | $ | 352 |
Senior Secured Indebtedness (g) | $ | 3,551 |  |  |  |  |  |  |
Leverage Ratio (h) | 2.07x |  |  |  |  |  |

______________________________________
(a)Reflects severance costs and other restructuring related expenses, including those related to the 2024 Strategic Restructuring Plan as well as the Executive Transition Costs in both the current and prior year.
(b)Reflects unrealized losses (gains) due to foreign exchange on our Euro-denominated debt, losses (gains) from foreign currency forward exchange contracts and intercompany transactions.
(c)Reflects costs associated with our transformation initiatives and technology system updates, which includes costs of $19 million and $74 million related to our finance transformation for the three and twelve months ended June 30, 2025, respectively, as well as $18 million and $70 million for the three and twelve months ended June 30, 2024, respectively.
(d)Reflects non-cash stock-based compensation expense related to the Omnibus Incentive Plan.
(e)Reflects non-cash activity, including the unrealized losses (gains) on the mark-to-market adjustment of equity investments, investment losses (gains) and non-cash impairment losses resulting from the 2024 Strategic Restructuring Plan as well as an impairment charge of $70 million for long-lived assets associated with certain of the Company’s non-core e-tailer operations recognized in the current period.
(f)Reflects expected savings resulting from transformation initiatives, including the 2025 Restructuring Plan, the 2024 Strategic Restructuring Plan, and the 2023 Restructuring Plan, as well as the pro forma impact of certain specified transactions for the three and twelve months ended June 30, 2025. Certain of these cost savings initiatives and transactions impacted quarters prior to the quarter during which they were identified within the last twelve-month period. The pro forma impact of these specified transactions and initiatives resulted in a $168 million increase in the twelve months ended June 30, 2025 Adjusted EBITDA.
(g)Reflects the balance of senior secured debt at Acquisition Corp. of approximately $4.061 billion less cash of $510 million, which excludes cash held at Tempo, an unrestricted subsidiary.
(h)Reflects the ratio of Senior Secured Indebtedness, including Revolving Credit Agreement Indebtedness, to Adjusted EBITDA. This is calculated net of cash and equivalents of the Company as of June 30, 2025 not exceeding $750 million in accordance with the Sixth Revolving Credit Agreement Amendment. If the outstanding aggregate principal amount of borrowings and drawings under letters of credit which have not been reimbursed under our Revolving Credit Facility is greater than $140 million at the end of a fiscal quarter, the maximum leverage ratio permitted under the Revolving Credit Facility is 5.00:1.00. The Company’s Revolving Credit Facility does not impose any “leverage ratio” maintenance requirement on the Company when the aggregate principal amount of borrowings and drawings under letters of credit, which have not been reimbursed under the Revolving Credit Facility, is less than or equal to $140 million at the end of a fiscal
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quarter. On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein. In connection with the acquisition of Tempo, the acquired entity was designated as an unrestricted subsidiary, and therefore net income and Adjusted EBITDA do not include the results of Tempo, and the Asset-Based Notes issued by a subsidiary of Tempo are not included in our indebtedness for purposes of calculating the Leverage Ratio.
Summary
Management believes that funds generated from our operations and borrowings under the Revolving Credit Facility and available cash and equivalents will be sufficient to fund our debt service requirements, working capital requirements and capital expenditure requirements for the foreseeable future. We also have additional borrowing capacity under our indentures and the Senior Term Loan Facility. However, our ability to continue to fund these items and to reduce debt may be affected by general economic, financial, competitive, legislative and regulatory factors, as well as other industry-specific factors such as the ability to control music piracy and the continued transition from physical to digital formats in the recorded music and music publishing industries. It could also be affected by the severity and duration of geopolitical conflicts or natural or man-made disasters, including pandemics. We and our affiliates continue to evaluate opportunities to, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, seek to pay dividends or prepay outstanding debt or repurchase or retire Acquisition Corp.’s outstanding debt or debt securities or repurchase our outstanding equity securities in open market purchases, privately negotiated purchases or otherwise. The amounts involved in any such transactions, individually or in the aggregate, may be material and may be funded from available cash or from additional borrowings. In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, we may seek to refinance the Senior Credit Facilities or our outstanding debt or debt securities with existing cash and/or with funds provided from additional borrowings.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As discussed in Note 17 to our audited consolidated financial statements for the fiscal year ended September 30, 2024, the Company is exposed to market risk arising from changes in market rates and prices, including movements in foreign currency exchange rates and interest rates. As of June 30, 2025, other than as described below, there have been no material changes to the Company’s exposure to market risk since September 30, 2024.
Foreign Currency Risk
Within our global business operations, we have transactional exposures that may be adversely affected by changes in foreign currency exchange rates relative to the U.S. dollar. We may at times choose to use foreign exchange currency derivatives, primarily forward contracts, to manage the risk associated with the volatility of future cash flows denominated in foreign currencies, such as unremitted or future royalties and license fees owed to our U.S. companies for the sale or licensing of U.S.-based music and merchandise abroad that may be adversely affected by changes in foreign currency exchange rates. We focus on managing the level of exposure to the risk of foreign currency exchange rate fluctuations on major currencies, which can include the Euro, British pound sterling, Japanese yen, Canadian dollar, Swedish krona, Australian dollar, Brazilian real, Mexican Peso, Norwegian krone, and Polish Zloty and in many cases we have natural hedges where we have expenses associated with local operations that offset the revenue in local currency and our Euro-denominated debt, which can offset fluctuations in the Euro. As of June 30, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $197 million and the purchase of $124 million of foreign currencies at fixed rates. Subsequent to June 30, 2025, certain of our foreign exchange contracts expired and were not replaced.
The fair value of foreign exchange contracts is subject to changes in foreign currency exchange rates. For the purpose of assessing the specific risks, we use a sensitivity analysis to determine the effects that market risk exposures may have on the fair value of our financial instruments. For foreign exchange forward contracts outstanding at June 30, 2025, we typically perform a sensitivity analysis assuming a hypothetical 10% depreciation of the U.S. dollar against foreign currencies from prevailing foreign currency exchange rates and assuming no change in interest rates. The fair value of the foreign exchange forward contracts would have decreased by $7 million based on this analysis. Hypothetically, even if there was a decrease in the fair value of the forward contracts, because our foreign exchange contracts are used to manage foreign currency exchange rate risk, these losses would be largely offset by gains on the underlying transactions.
Interest Rate Risk
We had $4.401 billion of principal debt outstanding at June 30, 2025, of which $1.312 billion was variable-rate debt and $3.089 billion was fixed-rate debt. As such, we are exposed to changes in interest rates. At June 30, 2025, 70% of the Company’s debt was at a fixed rate. In addition, as of June 30, 2025, we have the option under our floating rate loans under the Senior Term Loan Facility to select a one, three or six month Term SOFR.
Based on the level of interest rates prevailing at June 30, 2025, the fair value of the Company’s fixed-rate and variable-rate debt was approximately $4.217 billion. Further, as of June 30, 2025, based on the amount of the Company’s fixed-rate debt, a 25 basis point increase or decrease in the level of interest rates would decrease the fair value of the fixed-rate debt by approximately $31 million or increase the fair value of the fixed-rate debt by approximately $32 million. This potential fluctuation is based on the simplified assumption that the level of fixed-rate debt remains constant with an immediate across the board increase or decrease in the level of interest rates with no subsequent changes in rates for the remainder of the period.
Inflation Risk
Inflationary factors such as increases in overhead costs may adversely affect our results of operations. We do not believe that inflation has had a material effect on our business, financial condition or results of operations to date. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases for services. Our inability or failure to do so could harm our business, financial condition or results of operations.
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ITEM 4. CONTROLS AND PROCEDURES
Certification
The certifications of the principal executive officer and the principal financial officer (or persons performing similar functions) required by Rules 13a-14(a) and 15d-14(a) of the Exchange Act (the “Certifications”) are filed as exhibits to this report. This section of the report contains the information concerning the evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) (“Disclosure Controls”) and changes to internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) (“Internal Controls”) referred to in the Certifications and this information should be read in conjunction with the Certifications for a more complete understanding of the topics presented.
Introduction
The SEC’s rules define “disclosure controls and procedures” as controls and procedures that are designed to ensure that information required to be disclosed by public companies in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by public companies in the reports that they file or submit under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The SEC’s rules define “internal control over financial reporting” as a process designed by, or under the supervision of, a public company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, or U.S. GAAP, including those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
The Company’s management, including its principal executive officer and principal financial officer, does not expect that our Disclosure Controls or Internal Controls will prevent or detect all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the limitations in any and all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Further, the design of any control system is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected even when effective Disclosure Controls and Internal Controls are in place.
The Company previously started a multi-year implementation to upgrade our information technology and finance infrastructure, including related systems and processes. The upgrades are designed to enhance our financial records and the flow of financial information, improve data analysis and accelerate our financial reporting. The deployment of our new technology platform is currently being implemented using a wave-based approach. As of June 2025, the Company has completed the launch of the core financials component of our new technology platform for the Music Publishing segment as well as various Recorded Music territories. The Company will continue to roll out this component and additional components of the Enterprise Resource Planning (“ERP”) system in phases across our organization.
In connection with this ERP implementation, the Company has updated our internal controls over financial reporting, as necessary, to allow for modifications to our business processes and accounting procedures. As the wave-based implementation of our new technology platform continues, the Company will continue to change its processes and procedures which, in turn, could result in further changes to our internal controls over financial reporting. As such changes occur, the Company will evaluate whether such changes materially affect our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures
Based on management’s evaluation (with the participation of the Company’s principal executive officer and principal financial officer), as of the end of the period covered by this report, the Company’s principal executive officer and principal financial officer have concluded that the Company’s Disclosure Controls are effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act will be recorded, processed, summarized and
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reported within the time periods specified in SEC rules and forms, including that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Except as described above, there have been no changes in our internal control over financial reporting that occurred during the three and nine months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of business. The Company is currently subject to several such claims and legal proceedings. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors.
ITEM 1A. RISK FACTORS
There are no material changes to the risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of the Company’s Class A common stock during the three months ended June 30, 2025:

Period |  | Total Number of Shares Repurchased |  | Average Price Paid per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
April 2025 |  | 20,000 |  |  | $ | 29.50 |  |  | 20,000 |  |  | $ | 97 |
May 2025 |  | — |  |  | — |  |  | — |  |  | 97 |
June 2025 |  | — |  |  | — |  |  | — |  |  | 97

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
On August 5, 2025 (the “Closing Date”), Warner Music Inc. (“WMG”), a wholly owned subsidiary of the Company, entered into a Unit Purchase Agreement (the “Agreement”) by and among WMG, TenThousand Projects Holdings LLC (“10K Projects”), TenThousand Projects, LLC (“Seller”) and certain other parties thereto, pursuant to which WMG acquired from Seller, all of the common units of 10K Projects not already directly or indirectly owned by WMG (the “10K Units”), representing 49% of the issued and outstanding equity interests of 10K Projects.
The aggregate contractually agreed consideration for the 10K Units is $165 million, subject to contractual adjustments, payable by WMG in two installments. The first installment will be satisfied by a cash payment of $40 million (of which $30 million was paid on the Closing Date and $10 million will be paid on or about December 1, 2025) and issuance on the Closing Date of 1,416,666 shares of Class A Common Stock, the number of which was determined by dividing $42.5 million by $30 per share. The second installment is payable on the first anniversary of the Closing Date and will be satisfied, at the sole discretion of WMG, either by the issuance of 2,750,000 shares of Class A Common Stock, the number of which was determined by dividing $82.5 million by $30 per share, or in cash for an amount determined by multiplying 2,750,000 shares by the share price on the trading day immediately preceding issuance.
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The Class A Common Stock issued pursuant to the Agreement will be governed by lock-up periods, subject to certain exceptions, which will begin on the date of issuance and end (i) in respect of 1,416,666 shares of the Class A Common Stock issued on the Closing Date, on March 1, 2026 and (ii) in respect of the 2,750,000 shares of Class A Common Stock issued at the first anniversary of the Closing Date, on the date that is the second anniversary of the Closing Date.
The Class A Common Stock issued pursuant to the Agreement will be sold in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act, in a transaction not involving a public offering.
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ITEM 6. EXHIBITS
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit Number |  | Exhibit Description
10.1*† |  | Mutual Separation Agreement and Release, dated May 5, 202 5, between Warner Music Inc. and Bryan Castellani
10.2*† |  | Employment Agreement, dated A pril 10, 202 5, between Warner Music Inc. and Armin Zerza
10.3*†† |  | Master Operation s and Economics Agreement by and amo ng BCSS W JV Investments (B), L.P., WMG BC Holdco LLC, Beethoven JV 1, LLC, Beethoven Holdings 1, LLC, Beethoven Financi ng 1, LLC and WMG Acquisition Corp.
10.4*†† |  | A mende d and Restated Limited Liability Company Agreement of Beethoven JV 1, LLC
10.5*†† |  | C redit and Security Agreement among Beethov en Financing 1, LLC, Beethoven Holdings 1, LLC, Fifth Third Bank National Association, Goldman Sachs Bank USA and The Bank of New York Mellon
10.6*†† |  | First Amendment to Credit and Security Agreement among Beethoven Financing 1, LLC, Beethoven Holdings 1, LLC, Fifth Third Bank National Association, Goldman Sachs Bank USA and The Bank of New York Mellon
31.1* |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
31.2* |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
32.1** |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2** |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS |  | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH |  | XBRL Taxonomy Extension Schema Document
101.CAL |  | XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF |  | XBRL Taxonomy Extension Definition Linkbase Document
101.LAB |  | XBRL Taxonomy Extension Label Linkbase Document
101.PRE |  | XBRL Taxonomy Extension Presentation Linkbase Document
104* |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

______________________________________
* Filed herewith.
** Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Securities Exchange Act, as amended, or otherwise subject to the liability of Section 18 of the Securities Exchange Act, as amended, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, except to the extent that the registrant specifically incorporates it by reference.
† Identifies each management contract or compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
†† Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10(iv) of Regulation S-K. The registrant agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
August 7, 2025

| WARNER MUSIC GROUP CORP.
| By: |  | /s/ R OBERT K YNCL
| Name: Title: |  | Robert Kyncl Chief Executive Officer (Principal Executive Officer)
| By: |  | /s/ ARMIN ZERZA
| Name: Title: |  | Armin Zerza Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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