Warner Music Group WMG Form 10-Q filing Q3 FY2026

Page Number

Part I. Financial Information

Item#ieb2b06b000f9406d9e03b7f11b8202a3_131. Financial Statements (Unaudited) 1

Condensed Consolidated Balance Sheets as of June 30, 2026 and September 30, 2025 1

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2026 and June 30, 2025 2

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2026 and June 30, 2025 3

Condensed Consolidated Statements of Cash Flows for theNine Months Ended June 30, 2026 and June 30, 2025 4

Condensed Consolidated Statements of Equity for the Three and Nine Months Ended June 30, 2026 andJune 30, 2025 5

Notes to Condensed Consolidated Financial Statements 8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1693. Quantitative and Qualitative Disclosures About Market Risk 57

Item 4. Controls and Procedures 58

Part II. Other Information

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1781. Legal Proceedings 60

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1811A. Risk Factors 60

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1842. Unregistered Sales of Equity Securities and Use of Proceeds 60

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1873. Defaults Upon Senior Securities 60

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1904. Mine Safety Disclosures 60

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1935. Other Information 61

Item#ieb2b06b000f9406d9e03b7f11b8202a3_1996. Exhibits 62

Signatures 63

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

ITEM 1. FINANCIAL STATEMENTS

See accompanying notes

See accompanying notes

See accompanying notes

See accompanying notes

See accompanying notes

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, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026.

The consolidated balance sheet at September 30, 2025 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, 2025 (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 financial interest required to be consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated.

As of June 30, 2026 and September 30, 2025, there were approximately $61 million and $65 million of assets, respectively, related to variable interest entities (“VIEs”) included in our condensed consolidated balance sheets. As of both June 30, 2026 and September 30, 2025, there was 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.

Noncontrolling Interests

Interests held by third parties in consolidated subsidiaries are presented as noncontrolling interests, which represent the noncontrolling shareholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries. Noncontrolling interests that are not redeemable are reported in the equity section of the Consolidated Balance Sheets.

Noncontrolling interests, where the Company may be required to redeem the noncontrolling interest under contractual redemption requirements that are not solely within the control of the Company, are reported in the Consolidated Balance Sheets between liabilities and equity, as redeemable noncontrolling interests. The Company adjusts the redeemable noncontrolling interests to the higher of the current redemption value or the carrying value of the interests, the capital contributed by the third party adjusted for the noncontrolling interest’s share of net income (loss) and distributions, on each balance sheet date with changes in redemption value recognized as an adjustment to retained earnings attributable to common shareholders.

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 December 2023, the Financial Accounting Standards Board (“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 will include the required disclosures in its Annual Report on Form 10-K for the fiscal year ending September 30, 2026.

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 our fiscal year ending September 30, 2028, and interim periods within our fiscal year ending September 30, 2029. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendment aligns internal-use software capitalization practices with agile development methodologies and an external-use software model by introducing updated capitalization criteria and removing existing project staging guidance. The amendments in this ASU are effective for our fiscal year ending September 30, 2029. 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 potentially dilutive common shares, which is calculated using the treasury-stock method. The potentially dilutive common shares had a dilutive effect on the Company’s EPS calculation for the three and nine months ended June 30, 2026 and 2025.

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, 2026 and 2025 (in millions, except share amounts, which are reflected in thousands, and per share data):

(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.

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:

Sales Returns and Uncollectible Accounts

Based on management’s analysis of sales returns, refund liabilities of $16 million and $17 million were established at June 30, 2026 and September 30, 2025, respectively.

Based on management’s analysis of estimated credit losses, reserves of $27 million were established at both June 30, 2026 and September 30, 2025.

Deferred Revenue

Deferred revenue increased by $663 million during the nine months ended June 30, 2026 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period. Revenues of $230 million were recognized during the nine months ended June 30, 2026 related to the balance of deferred revenue at September 30, 2025. There were no other significant changes to deferred revenue during the reporting period.

Performance Obligations

For the three months ended June 30, 2026 and June 30, 2025, the Company recognized revenue of $9 million and $10 million, respectively, from performance obligations satisfied in previous periods. For the nine months ended June 30, 2026 and June 30, 2025, the Company recognized revenue of $47 million and $67 million, respectively, from performance obligations satisfied in previous periods.

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at June 30, 2026 are as follows:

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 and minimum pension liabilities. The following summary sets forth the changes in the components of accumulated other comprehensive loss.

(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:

(a)Other adjustments during the nine months ended June 30, 2026 represent foreign currency movements.

The increase in goodwill during the nine months ended June 30, 2026 is primarily driven by strategic business acquisitions within our Recorded Music segment. The Company performs its annual goodwill impairment test in accordance with ASC 350, Intangibles—Goodwill and Other, 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.

Intangible Assets

Intangible assets consist of the following:

The increase in net intangible assets during the nine months ended June 30, 2026 is primarily related to the acquisitions of recorded music catalogs and music publishing copyrights for approximately $403 million through the Beethoven joint venture. See Note 7 and Note 11 for additional information regarding the structure and activities of the joint venture.

7. Debt

Debt Capitalization

As of June 30, 2026, our long-term debt consists of the following:

(a)Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2026 and September 30, 2025. There were no loans outstanding under the Revolving Credit Facility as of June 30, 2026 and September 30, 2025.

(b)On March 11, 2026, Acquisition Corp. borrowed all of the Term Loan A Facility to repay all of the outstanding loans under the Term Loan B Facility.

(c)Reflects $750 million of commitments under the Beethoven Credit Agreement. There were $370 million in loans outstanding under the Beethoven Credit Agreement at June 30, 2026. Loans outstanding under the Beethoven Credit Agreement are secured only by certain music rights owned by Beethoven JV 1, LLC, a Delaware limited liability company (“Beethoven”), and are nonrecourse to the Company and its subsidiaries, other than Beethoven.

(d)The Tempo Asset-Based Notes due 2050 are secured only by certain music rights owned by Tempo Music Holdings, LLC (“Tempo Music”) and are nonrecourse to the Company and its subsidiaries, other than Tempo Music.

Acquisition Corp. Long-Term Debt

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 term loan A facility and a $350 million revolving facility, pursuant to an amended and restated credit agreement dated March 11, 2026 (the “Credit Agreement”), with JPMorgan Chase Bank NA, as administrative agent, and the other financial institutions and lenders from time to time party thereto. Additionally, as of June 30, 2026, 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. 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 Agreement for the Acquisition Corp. credit facilities, including the Revolving Credit Facility (as defined below) and the Tranche A Term Loans (as defined below).

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Tranche A Term Loans as of June 30, 2026.

Other Long-Term Debt

The Company holds approximately $311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo Music, which are secured only by certain music rights owned by Tempo Music and are nonrecourse to the Company and its subsidiaries, other than Tempo Music. 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. As of June 30, 2026, Tempo Music is in compliance with the covenants under the Asset-Based Notes.

Additionally, WMG BC Holdco LLC (“WMGCo”), a wholly-owned indirect subsidiary of the Company, and BCSS W JV Investments (B), L.P. (“BainCo”), a wholly-owned indirect subsidiary of Bain Capital Special Situations, LP, operate Beethoven, which is party to a Credit and Security Agreement (the “Beethoven Credit Agreement”), dated as of June 29, 2025, with 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) pursuant to which the Lenders have agreed to extend up to $500 million in commitment amounts to Beethoven Financing 1, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of Beethoven, as the initial borrower (the “Initial Borrower” and, together with each additional borrower from time to time party thereto, the “Borrowers”) (the “Beethoven Credit Facility”). The obligations of the Borrowers under the Beethoven Credit Agreement are (a) secured by the Borrowers with a first priority security interest in all of their respective assets and (b) guaranteed by Beethoven Holdings 1 LLC, a Delaware limited liability company and a wholly-owned direct subsidiary of Beethoven and the direct parent of the Initial Borrower, as the initial guarantor (together with the additional guarantors from time to time party thereto, the “Guarantors”) with a first priority security interest in all of the Guarantors’ 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 $750 million. There were $370 million of loans outstanding under the Beethoven Credit Agreement at June 30, 2026. As of June 30, 2026, the Initial Borrower is in compliance with the covenants under the Beethoven Credit Agreement. On May 5, 2026, the Lenders, pursuant to an amendment to the Beethoven Credit Agreement (the “Credit Agreement Amendment”), agreed to increase the aggregate commitments under the Beethoven Credit Agreement from $500 million to $750 million. The Credit Agreement Amendment also provides that, subject to the consent of the Lenders, the Borrowers may further increase the size of the facility up to an aggregate commitment of $950 million.

On February 4, 2026, WMGCo entered into an amendment (the “Amendment”) to a Master Operations and Economics Agreement, dated as of June 29, 2025 (as amended from time to time, the “Master Operations and Economics Agreement”), by and among WMGCo, BainCo, and certain affiliates of the foregoing parties. Pursuant to the Amendment, WMGCo and BainCo have committed to increase their respective initial equity commitment amounts by $100 million each.

Fiscal 2026 Transactions

March 2026 Credit Agreement Amendment

On March 11, 2026, Acquisition Corp. entered into the Credit Agreement among Acquisition Corp., as borrower, the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Credit Agreement amends and restates in its entirety the Credit Agreement, dated as of November 1, 2012, among Acquisition Corp., JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto, and incorporates, as amended and restated, the revolving credit facility provided under the Credit Agreement, dated as of January 31, 2018, among Acquisition Corp., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto.

The Credit Agreement provides for a $350 million revolving credit facility (the “Revolving Credit Facility”) and a $1,295 million term loan A facility (the “Tranche A Term Loans”). Subject to certain conditions, Acquisition Corp. may obtain increases in the commitments under the Revolving Credit Facility and incur incremental term loans. As of June 30, 2026, Acquisition Corp. had borrowed all of the Tranche A Term Loans to repay Acquisition Corp.’s term loan B facility. No amounts were drawn under the Revolving Credit Facility as of June 30, 2026.

In connection with the Credit Agreement, the Company recorded a loss on extinguishment of debt of approximately $7 million for the nine months ended June 30, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs. The use of proceeds from the $1,295 million Tranche A Term Loans has been presented in the accompanying consolidated statement of cash flows. The Company recognized deferred financing costs of $4 million associated with the amendment.

Interest Rates

The loans under the Credit Agreement bear interest at Acquisition Corp.’s election at a rate equal to (i) a forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“SOFR”), subject to a zero floor, plus the applicable margin, or (ii) an alternative base rate (“ABR”), 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) one-month Term SOFR (as defined in the Credit Agreement) plus 1.0% per annum, in each case, subject to a 1.00% floor plus the applicable margin. The applicable margin for the Tranche A Term Loans ranges from 1.250% to 1.625% per annum for SOFR loans and from 0.250% to 0.625% per annum for ABR loans, in each case based upon Acquisition Corp.’s issuer credit ratings. The applicable margin for borrowings under the Revolving Credit Facility ranges from 1.125% to 1.750% per annum for SOFR loans and 0.125% to 0.750% per annum for ABR loans, in each case based upon Acquisition Corp.’s issuer credit ratings.

Based on the Applicable Debt Rating of BBB- at June 30, 2026, the applicable margin for SOFR loans and risk-free rate loans would be 1.250%; the applicable margin for ABR loans would be 0.250% in the case of Initial Revolving Loans (as defined in the Credit Agreement); the applicable margin for SOFR loans and risk-free rate loans would be 1.375%; and the applicable margin for ABR loans would be 0.375% in the case of the Tranche A Term Loan. 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 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.

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 and caps to manage interest rate risk. Under the Beethoven Credit Agreement, the Company maintains an interest rate cap agreement to manage its interest rate risk, capping a portion of the exposure at 4.445% for a two-year period. As of June 30, 2026, there are no interest rate swaps outstanding.

Maturity of Tranche A Term Loans

The loans outstanding under the Tranche A Term Loans mature on March 11, 2031.

Maturity of Revolving Credit Facility

The maturity date of the Revolving Credit Facility is March 11, 2031.

Maturities of Senior Secured Notes

As of June 30, 2026, there are no scheduled maturities of notes until 2028, when $371 million is scheduled to mature. Thereafter, $2.694 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 $49 million and $43 million for the three months ended June 30, 2026 and 2025, respectively, and $135 million and $119 million for the nine months ended June 30, 2026 and 2025, respectively. Interest expense, net includes interest expense related to our outstanding indebtedness of $46 million and $45 million for the three months ended June 30, 2026 and 2025, respectively, and $136 million and $132 million for the nine months ended June 30, 2026 and 2025, respectively. The weighted-average interest rate of the Company’s total debt was 4.0% at June 30, 2026, 4.1% at September 30, 2025, and 4.1% at June 30, 2025.

8. Restructuring and Impairments

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 2025 Restructuring Plan is expected to be fully implemented by the end of calendar year 2026. The Company expects to incur total charges of approximately $200 million on a pre-tax basis or approximately $150 million on an after-tax basis. Approximately $170 million of the charges will be for severance payments and other related termination costs and approximately $30 million of certain other charges. The Company anticipates that the Plan will result in cash expenditures of approximately $200 million, of which $170 million is expected to be paid by the end of fiscal year 2026.

For the three months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $4 million, of which $3 million of expense was recognized in our Recorded Music segment and $1 million was recognized in Corporate. For the nine months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $34 million, of which $21 million of expense was recognized in our Recorded Music segment and $13 million was recognized in Corporate. As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2025 Restructuring Plan were $152 million with $100 million of costs recognized in our Recorded Music segment, $5 million of costs recognized in our Music Publishing segment, and $47 million recognized in Corporate. These costs are composed of $124 million of severance costs and $28 million of non-cash impairment charges primarily related to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets. There were no charges recognized under the 2025 Restructuring Plan for the three and nine months ended June 30, 2025.

The following table sets forth the activity for the nine months ended June 30, 2026 in the restructuring accrual associated with the 2025 Restructuring Plan included within accrued liabilities in the accompanying consolidated balance sheets:

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 complete and the remaining associated cash payments are expected to be made by the end of fiscal year 2026.

As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $215 million with $206 million of costs recognized in our Recorded Music segment and $9 million recognized in Corporate. These costs are composed of $133 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges. There was a $1 million benefit recognized for the nine months ended June 30, 2026 related to the 2024 Strategic Restructuring Plan.

The below table sets forth the activity for the nine months ended June 30, 2026 in the restructuring accrual associated with the 2024 Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

Other Impairments

For the three and nine months ended June 30, 2026, the Company recognized an impairment charge of $3 million and $14 million, respectively, within the Recorded Music segment for long-lived assets associated with EMP Merchandising (“EMP”), which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025. Please refer to Note 15 for further discussion. For the three and nine months ended June 30, 2025, prior to its classification as held for sale, the Company recognized an impairment charge of $70 million within the Recorded Music segment for long-lived assets associated with EMP.

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 13, “Equity,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Stock-based compensation consists primarily of common stock, restricted stock units (“RSUs”), deferred share units, stock options, and market-based performance share units (“PSUs”) granted to eligible employees and executives under the Omnibus Incentive Plan. For the three and nine months ended June 30, 2026, the Company recognized a total of $2 million and $33 million of non-cash stock-based compensation expense, respectively, all of which was recorded to additional paid-in capital. 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 share-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 share-based compensation liability.

Common Stock

During the three and nine months ended June 30, 2026, the Company satisfied the vesting of PSUs and RSUs by issuing 31,575 and 1,030,956 shares, respectively, of Class A Common Stock under the Omnibus Incentive Plan, which is net of shares used to settle employee income tax obligations.

During the three and nine months ended June 30, 2026, the Company completed a strategic business acquisition whereby the Company issued 1,462,666 restricted common shares. Of this total, 298,116 shares were recognized as acquisition consideration which resulted in an increase in additional paid-in capital of $9 million. The remaining 1,164,550 shares will be recognized as post-combination compensation expense as the applicable vesting conditions are met.

Share Repurchase Program

On November 14, 2024, the Company’s board of directors authorized a $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, 2026 and 2025:

11. Redeemable Noncontrolling Interest

As of June 30, 2026, the redeemable noncontrolling interests (“RNCI”) consist of interests in Beethoven, a consolidated subsidiary. The Company consolidates Beethoven based on its controlling financial interest of the joint venture through the Company's majority representation on the board. BainCo, the noncontrolling interest holder in Beethoven, has a 50% ownership share and is entitled to receive 50% of the required quarterly distributions made by the joint venture from available cash. For distributions resulting from a liquidity event, including the sale of the joint venture, an initial public offering, or other liquidity event as defined in the Master Operations and Economics Agreement, the noncontrolling interest holder is entitled to proceeds from such event until its contributed capital is returned with an annualized return of 8%, subject to certain adjustments, after which the Company will receive distributions for an equal amount, with any additional amounts distributed equally.

Beginning on the sixth anniversary of formation, the noncontrolling interest holder has an exit right, that upon providing notice, the Company has the option to acquire the noncontrolling interest holder’s interest for a price negotiated with the noncontrolling interest holder or otherwise determined by an independent fair market valuation, subject to certain adjustments, if elected. If not acquired by the Company, the noncontrolling interest holder can initiate and complete a sale of Beethoven or an initial public offering that includes the interests held by the Company. Beginning on the eighth anniversary, the Company will also have a similar exit right, that provides similar rights to negotiate the sale of the Company’s interests to the noncontrolling interest holder.

Given the exit rights held by the noncontrolling interest holder may result in the interests being redeemed by the Company based on events that are not solely in its control, the noncontrolling interest is presented in the Consolidated Balance Sheets at the greater of the current estimated redemption value or carrying value of the interests including adjustments for the attribution of income to the noncontrolling interest holder. The Company adjusts the redeemable noncontrolling interest to the greater of the current estimated redemption value or carrying value at the end of each reporting period, with changes recognized as adjustments to retained earnings.

During the three and nine months ended June 30, 2026, redeemable noncontrolling interests included capital contributions of $1 million and $135 million, and net loss attributions of $4 million and $5 million, respectively. Following loss allocations, the interest was remeasured to its estimated redemption value as of June 30, 2026, resulting in a $3 million net increase to redeemable noncontrolling interest. This remeasurement resulted in expense recognized of $1 million in Other income (expense), net and an adjustment of $2 million to additional paid-in capital. As of June 30, 2026, the carrying value was $133 million.

In the second quarter of fiscal year 2026, the Company sold recorded music catalog rights to Beethoven for consideration of $233 million, receiving $182 million of cash in return, net of the Company’s portion of contributions to the joint venture for the acquisition. Given the Company consolidates Beethoven, no gain was recognized, and the cash received is recognized as contributions from redeemable noncontrolling interest holder and issuance of debt under the Beethoven Credit Facility.

12. Income Taxes

For the three and nine months ended June 30, 2026, the Company recorded an income tax expense of $67 million and $211 million, respectively. The income tax expense for the three months ended June 30, 2026 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, and U.S. state and local taxes. These charges were partially offset by a tax benefit associated with change in prior year estimates. The income tax expense for the nine months ended June 30, 2026 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than the United States, including withholding taxes, U.S. state and local taxes, taxable gain on contribution to Beethoven JV, and non-deductible compensation under Internal Revenue Code (“IRC”) Section 162(m). These charges were partially offset with tax benefits associated with partial release of valuation allowance on EMP and change in prior year estimates.

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 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 noncontrolling interest.

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of June 30, 2026 could decrease by up to approximately $1 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 legislation as of January 1, 2025 and others are expected to enact legislation in the next few years. The Company has evaluated the potential impact of the rules based on the most recently available information. For the fiscal year ended September 30, 2026, the impact on the Company is expected to be 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. In fiscal year 2026, the Company is benefitting from the changes to the business interest expense deduction limitation, allowing for an accelerated deduction, and restored expensing for domestic research and development costs.

13. 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, 2026, the Company had outstanding foreign currency forward exchange contracts for the sale of $524 million and the purchase of $292 million of foreign currencies at fixed rates. As of September 30, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $460 million and the purchase of $170 million of foreign currencies at fixed rates.

The Company recorded realized pre-tax losses of $4 million and unrealized pre-tax gains of $4 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, 2026. 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 following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at June 30, 2026 and September 30, 2025:

(a)For June 30, 2026 includes $14 million and $10 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $5 million of current assets and $1 million of current liabilities, respectively. For September 30, 2025 includes $3 million and $6 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $0 million of current assets and $3 million of current liabilities, respectively.

(b)For June 30, 2026 includes $1 million of an interest rate cap in a noncurrent asset position for an interest rate cap that caps the interest rate on a portion of the Beethoven Debt at 4.445% for two years.

14. 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 and further description of these segments is set forth below and can be found in Note 1. The Company’s Chief Operating Decision Maker, which is our Chief Executive Officer, allocates resources and evaluates performance based on several factors, including operating income (loss) and other financial measures.

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, 2025. 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.

(a) Depreciation expense is a component of general and administrative expense.

15. Additional Financial Information

Supplemental Cash Flow Disclosures

The Company made interest payments of approximately $36 million and $43 million during the three months ended June 30, 2026 and 2025, respectively, and approximately $128 million and $114 million during the nine months ended June 30, 2026 and 2025, respectively. The Company paid approximately $53 million and $50 million of income and withholding taxes, net of refunds, for the three months ended June 30, 2026 and 2025, respectively, and approximately $179 million and $151 million of income and withholding taxes, net of refunds, for the nine months ended June 30, 2026 and 2025, respectively. Non-cash investing activities were approximately $87 million and primarily consist of deferred consideration for acquisitions of music publishing rights, music catalogs, and business combinations, equity issued for a strategic business combination (see Note 10), and the receipt of non-cash consideration during the nine months ended June 30, 2026 and $32 million primarily consisting of deferred consideration for acquisitions of music publishing rights, music catalogs, and business combinations during the nine months ended June 30, 2025.

Assets and Liabilities Held for Sale

In the fourth quarter of fiscal year 2025, the Company signed a non-binding letter of intent to sell its EMP business within our Recorded Music segment, which was classified as held for sale. The sale is expected to be completed by the end of the current fiscal year. Upon classification as held for sale, the business was measured at the lower of its carrying amount or its estimated fair value less costs to sell. For the three and nine months ended June 30, 2026, the Company recognized an impairment charge of $3 million and $14 million, respectively, within the Recorded Music segment for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025. The recoverable fair value was determined based on current market indicators.

The major classes of assets and liabilities of the business held for sale as of June 30, 2026 are as follows:

Net Gain (Loss) on Divestitures

The Company recognized a pre-tax loss of $5 million during the nine months ended June 30, 2026 in connection with the divestiture of certain assets which have been reflected as a net loss (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 that has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.

Dividends

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 7, 2026, 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, which was paid to stockholders on June 2, 2026. The Company paid an aggregate of approximately $100 million and $300 million, or $0.19 and $0.57 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2026, respectively.

On August 5, 2026, the Company’s board of directors declared a cash dividend of $0.20 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 1, 2026, to stockholders of record as of the close of business on August 20, 2026.

16. 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, 2026 and September 30, 2025.

(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.

(c)The fair value of the interest rate cap is based on market forward rates and volatility as of June 30, 2026.

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. Furthermore, assets classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. When the Company determines that the fair value of an asset group held for sale is less than its carrying value, a non-recurring fair value adjustment is recognized as a loss in the period the held-for-sale criteria are met. The Company estimated the fair value of the assets held for sale based on current market indicators.

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. The Company did not record any impairment charges on these investments during the three and nine months ended June 30, 2026 and recorded approximately $1 million and $4 million of impairment charges on these investments during the three and nine months ended June 30, 2025, respectively. In addition, there were no observable price change events that were completed during the three and nine months ended June 30, 2026 and 2025.

Fair Value of Debt

Based on the level of interest rates prevailing at June 30, 2026, the fair value of the Company’s debt was $4.609 billion. Based on the level of interest rates prevailing at September 30, 2025, the fair value of the Company’s debt was $4.270 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.

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, 2026 (the “Quarterly Report”).

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, 2026 and June 30, 2025. 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, 2026 and June 30, 2025, as well as a discussion of our financial condition and liquidity as of June 30, 2026. 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 Adjusted OIBDA. We define Adjusted OIBDA as operating income (loss) adjusted to exclude the following items: (i) non-cash depreciation of tangible assets, (ii) non-cash amortization of intangible assets, (iii) non-cash stock-based compensation and other related expenses, (iv) gains or losses on divestitures, (v) expenses related to restructuring and transformation initiatives, which include costs associated with the Company’s financial transformation initiative to design and implement new information technology and upgrade our finance infrastructure, and (vi) executive transition costs. Items excluded are not viewed to contribute directly to management’s evaluation of operating results. 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 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 190,000 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. 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 Records Nashville.

Outside the United States, our Recorded Music business is conducted 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’s 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 and marketing network (formerly Warner-Elektra-Atlantic Corporation, or WEA Corp.), which markets, distributes and sells music and video products to retailers and wholesale distributors, and enhances relationships with fans by creating artist merchandise, which we operate, market and sell across various channels, including e-commerce and retail and through touring. Our business’s 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.

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, through various subsidiaries, affiliates, and non-affiliated licensees and sub-publishers. We own or control rights to more than two 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 190,000 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 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

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 the fiscal year 2027 and expects the majority of the cost savings under the 2025 Restructuring Plan to be accretive to Adjusted OIBDA. The 2025 Restructuring Plan is expected to be fully implemented by the end of calendar year 2026. The Company expects to incur total charges of approximately $200 million on a pre-tax basis or approximately $150 million on an after-tax basis. Approximately $170 million of the charges will be for severance payments and other related termination costs and approximately $30 million of certain other charges. The Company anticipates that the Plan will result in cash expenditures of approximately $200 million of which $170 million is expected to be paid by the end of fiscal year 2026.

For the three months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $4 million, of which $3 million of expense was recognized in our Recorded Music segment and $1 million was recognized in Corporate. For the nine months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $34 million, of which $21 million of expense was recognized in our Recorded Music segment and $13 million was recognized in Corporate. As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2025 Restructuring Plan were $152 million with $100 million of costs recognized in our Recorded Music segment, $5 million of costs recognized in our Music Publishing segment, and $47 million recognized in Corporate. These costs are composed of $124 million of severance costs and $28 million of non-cash impairment charges primarily related to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets. There were no charges recognized under the 2025 Restructuring Plan for the three and nine months ended June 30, 2025.

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 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 transformation initiative. The Company allocated a majority of the cost savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities.

As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $215 million with $206 million of costs recognized in our Recorded Music segment and $9 million recognized in Corporate. These costs are composed of $133 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges. There was a $1 million benefit recognized for the nine months ended June 30, 2026 related to the 2024 Strategic Restructuring Plan.

Other Impairments

For the three and nine months ended June 30, 2026, the Company recognized an impairment charge of $3 million and $14 million, respectively, within the Recorded Music segment for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025. For the three and nine months ended June 30, 2025, prior to its classification as held for sale, the Company recognized an impairment charge of $70 million within the Recorded Music segment for long-lived assets associated with EMP.

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 was a phased in-sourcing of distribution during the prior fiscal year with BMG rolled off at the end of the prior fiscal year.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025

Consolidated Results

Revenues

Our revenues were composed of the following amounts (in millions):

Total Revenues

Total revenues increased by $175 million, or 10%, to $1,864 million for the three months ended June 30, 2026 from $1,689 million for the three months ended June 30, 2025. Revenue growth was impacted by digital revenue from the settlement of certain copyright infringement cases of $16 million in the prior-year quarter (the “Copyright Settlement”). Recorded Music revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $10 million less Recorded Music digital revenue compared to the prior-year quarter. Adjusted for these items, total revenues increased by $201 million, or 12%, which includes $16 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, 2026 and June 30, 2025. Prior to intersegment eliminations, U.S. and international revenues represented 42% and 58% of total revenues for the three months ended June 30, 2026 and 43% and 57% of total revenues for the three months ended June 30, 2025.

Total digital revenues after intersegment eliminations increased by $119 million, or 11%, to $1,251 million for the three months ended June 30, 2026 from $1,132 million for the three months ended June 30, 2025. Total streaming revenue increased by $135 million, driven by growth in Recorded Music and Music Publishing. Total streaming revenue includes $15 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2026 were composed of U.S. revenues of $556 million and international revenues of $695 million, or 44% and 56% of total digital revenues, respectively. 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.

Recorded Music revenues increased by $134 million, or 10%, to $1,488 million for the three months ended June 30, 2026 from $1,354 million for the three months ended June 30, 2025. The increase includes $13 million of favorable currency exchange fluctuations. U.S. Recorded Music revenues were $587 million and $536 million, or 39% and 40% of consolidated Recorded Music revenues for each of the three months ended June 30, 2026 and June 30, 2025, respectively. International Recorded Music revenues were $901 million and $818 million, or 61% and 60%, of consolidated Recorded Music revenues for each of the three months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights and physical revenues. Digital revenue increased by $87 million, or 9%, which includes a favorable impact of currency exchange fluctuations of $14 million, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription and ad-supported revenues. Adjusted for the impacts of the Copyright Settlement and BMG Termination in the prior-year quarter, digital revenue increased $113 million, or 13%. Revenue from streaming services increased by $106 million, or 12%, to $1,001 million for the three months ended June 30, 2026 from $895 million for the three months ended June 30, 2025. Adjusted for the impact of the BMG Termination in the prior-year quarter, Recorded Music streaming revenue increased $116 million, or 13%. Download and other digital revenues decreased by $19 million, or 56%, to $15 million for the three months ended June 30, 2026 from $34 million for the three months ended June 30, 2025, primarily due to the $16 million impact of the Copyright Settlement in the prior-year quarter. Artist services and expanded-rights revenue increased by $29 million, or 15%, due to higher concert promotion revenue primarily in Japan and higher merchandising revenue. Physical revenue increased by $18 million, or 15%, primarily driven by strong releases in the quarter as well as catalog and carryover success, partially offset by an unfavorable impact of foreign currency exchange rates of $2 million. Licensing revenue remained constant for each of the three months ended June 30, 2026 and June 30, 2025. Top sellers in the quarter included Bruno Mars, Don Toliver, sombr, Alex Warren and Madonna.

Music Publishing revenues increased by $41 million, or 12%, to $377 million for the three months ended June 30, 2026 from $336 million for the three months ended June 30, 2025. U.S. Music Publishing revenues were $194 million and $186 million, or 51% and 55% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively. International Music Publishing revenues were $183 million and $150 million, or 49% and 45% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Music Publishing revenue was driven by increases in digital, synchronization, mechanical, and performance revenues. Digital revenue increased by $31 million, or 15%, driven by an increase in streaming revenue. Revenue from streaming services grew by $29 million, or 14%, to $231 million for the three months ended June 30, 2026 from $202 million for the three months ended June 30, 2025, driven by continued market growth and the impact of new deals and renewals. Synchronization revenue increased by $6 million, or 11%, attributable to an increase in other copyright infringement settlements of approximately $6 million, and a favorable impact of foreign currency exchange rates of $2 million. Mechanical revenue increased by $3 million, or 19%, driven by the timing of distributions. Performance revenue increased by $1 million, or 2%, which includes a favorable impact of foreign currency exchange rates of $2 million.

Revenue by Geographical Location

U.S. revenue increased by $59 million, or 8%, to $781 million for the three months ended June 30, 2026 from $722 million for the three months ended June 30, 2025. U.S. Recorded Music revenue increased by $51 million, or 10%. U.S. Recorded Music digital revenue increased by $14 million, or 3%, driven by higher streaming revenue of $31 million, or 8%, partially offset by the impacts of the Copyright Settlement of $16 million and the BMG Termination of $7 million in the prior-year quarter. U.S. Recorded Music licensing revenue increased by $9 million, or 26%, driven by higher copyright infringement settlements of $5 million. U.S. Recorded Music physical revenue increased $21 million, or 45%, driven by strong releases in the quarter as well as catalog and carryover success. U.S. Recorded Music artist services and expanded-rights revenues increased by $7 million, or 16%, driven by higher merchandising revenue of approximately $12 million. U.S. Music Publishing revenue increased by $8 million, or 4%, to $194 million for the three months ended June 30, 2026 from $186 million for the three months ended June 30, 2025. U.S. Music Publishing digital revenue increased by $7 million, or 6%, attributable to higher streaming revenue of $7 million, or 6%. U.S. Music Publishing synchronization revenue increased by $3 million, or 8%, driven by timing of certain copyright infringement settlements. U.S. Music Publishing performance decreased by $2 million, or 10%, and mechanical revenue increased by $1 million, or 33%.

International revenue increased by $116 million, or 12%, to $1,084 million for the three months ended June 30, 2026 from $968 million for the three months ended June 30, 2025. Excluding the favorable impact of foreign currency exchange rates of $17 million, international revenue increased by $99 million, or 10%. International Recorded Music revenue increased by $83 million, which includes a favorable impact of foreign currency exchange rates of $13 million, driven by growth across digital and artist services and expanded rights, partially offset by decreases in licensing and physical revenues. International Recorded Music digital revenue increased by $73 million, attributable to higher streaming revenue of $75 million, or 15%, and a favorable impact of foreign currency exchange rates of $14 million, partially offset by the impact of the BMG Termination of $3 million in the prior-year quarter. International Recorded Music artist services and expanded-rights revenue increased by $22 million, or 14%, driven by higher concert promotion revenue primarily in Japan. These increases were partially offset by a decrease in licensing revenue of $9 million, or 12%, and a decrease in physical revenue of $3 million driven by the unfavorable impact of foreign currency exchange rates of $2 million. International Music Publishing revenue increased by $33 million, or 22%, to $183 million for the three months ended June 30, 2026 from $150 million for the three months ended June 30, 2025. International Music Publishing revenue growth was driven by increases in digital revenue of $24 million due to growth in streaming of $22 million, mechanical revenue of $2 million driven by the timing of distributions, performance revenue of $3 million, or 8%, and synchronization revenue of $3 million, or 18%.

Cost of revenues

Our cost of revenues was composed of the following amounts (in millions):

Artist and repertoire costs increased by $69 million, to $653 million for the three months ended June 30, 2026 from $584 million for the three months ended June 30, 2025. Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the three months ended June 30, 2026 and June 30, 2025.

Product costs increased by $28 million, to $357 million for the three months ended June 30, 2026 from $329 million for the three months ended June 30, 2025. Product costs as a percentage of revenue remained constant at 19% for each of the three months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expenses

Our selling, general and administrative expenses were composed of the following amounts (in millions):

(1) Includes depreciation expense of $33 million and $29 million for the three months ended June 30, 2026 and June 30, 2025, respectively.

Total selling, general and administrative expense decreased by $7 million, to $464 million for the three months ended June 30, 2026 from $471 million for the three months ended June 30, 2025, primarily driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of $3 million. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 25% for the three months ended June 30, 2026 from 28% for the three months ended June 30, 2025 due to the factors noted below.

General and administrative expense decreased by $18 million to $264 million for the three months ended June 30, 2026 from $282 million for the three months ended June 30, 2025. The decrease in general and administrative expense was primarily driven by cost savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher depreciation expense of $4 million due to the core financials component of our new technology platform being placed into service. Expressed as a percentage of revenue, general and administrative expense decreased to 14% for the three months ended June 30, 2026 compared to 17% for the three months ended June 30, 2025.

Selling and marketing expense decreased by $3 million, or 2%, to $164 million for the three months ended June 30, 2026 from $167 million for the three months ended June 30, 2025. Expressed as a percentage of revenue, selling and marketing expense decreased to 9% for the three months ended June 30, 2026 from 10% for the three months ended June 30, 2025 due to savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.

Distribution expense increased by $14 million to $36 million for the three months ended June 30, 2026 from $22 million for the three months ended June 30, 2025. Expressed as a percentage of revenue, distribution expense increased to 2% for the three months ended June 30, 2026 compared to 1% for the three months ended June 30, 2025, driven by higher physical and merchandising revenues.

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):

Adjusted OIBDA

Adjusted OIBDA increased by $60 million to $433 million for the three months ended June 30, 2026 from $373 million for the three months ended June 30, 2025, driven by strong operating performance, revenue mix and savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by the impact of the Copyright Settlement of $9 million and the BMG Termination of $1 million in the prior-year quarter and unfavorable movements in foreign currency exchange rates of approximately $16 million. Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 23% for the three months ended June 30, 2026 from 22% for the three months ended June 30, 2025.

Non-cash stock-based compensation and other related costs

There were no non-cash stock-based compensation and other related costs for the three months ended June 30, 2026 primarily due to the favorable impact of forfeitures. Non-cash stock-based compensation and other related costs were $16 million for the three months ended June 30, 2025 which included $5 million of costs related to the departure of our former CFO.

Executive transition costs

There were no executive transition costs for the three months ended June 30, 2026. 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 during fiscal 2025.

Transformation initiative costs

Our transformation initiative costs, which include costs associated with our finance transformation, decreased by $9 million to $10 million for the three months ended June 30, 2026 from $19 million for the three months ended June 30, 2025 primarily driven by lower project costs associated with our finance transformation.

Restructuring and Impairments

Our restructuring and impairment charges decreased to $7 million for the three months ended June 30, 2026 from $69 million for the three months ended June 30, 2025. The three months ended June 30, 2026 includes an additional impairment charge of $3 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025. The three months ended June 30, 2025 includes the initial impairment charge of $70 million for long-lived assets associated with EMP.

Depreciation expense

Our depreciation expense increased by $4 million to $33 million for the three months ended June 30, 2026 from $29 million for the three months ended June 30, 2025. The increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.

Amortization expense

Our amortization expense increased by $11 million, to $78 million for the three months ended June 30, 2026 from $67 million for the three months ended June 30, 2025. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by a decrease of approximately $1 million from the classification of EMP intangible assets as held for sale.

Operating income

Our operating income increased by $136 million to $305 million for the three months ended June 30, 2026 from $169 million for the three months ended June 30, 2025, primarily due to the factors impacting Adjusted OIBDA described above and a decrease in restructuring and impairment charges of $62 million. The increase in operating income was partially offset by higher amortization expenses of $11 million for the three months ended June 30, 2026.

Interest expense, net

Our interest expense, net, increased to $49 million for the three months ended June 30, 2026 from $43 million for the three months ended June 30, 2025 primarily due to interest expense on incremental debt of approximately $7 million related to the Beethoven Credit Agreement, partially offset by lower interest rates on variable rate debt in the quarter.

Other (income) expense

Other income for the three months ended June 30, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $3 million, a currency exchange loss on intercompany loans of $1 million, and a realized and unrealized loss on hedging activity of $1 million. This compares to 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 for the three months ended June 30, 2025.

Income tax expense

Our income tax expense increased by $62 million to $67 million for the three months ended June 30, 2026 from $5 million for the three months ended June 30, 2025. The increase of $62 million in income tax expense is primarily due to an increase in pre-tax income in the quarter and a $20 million smaller benefit from EMP impairment in the current year quarter.

Net income (loss)

Net income increased by $216 million to $200 million for the three months ended June 30, 2026 from a net loss of $16 million for the three months ended June 30, 2025 as a result of the factors described above.

Noncontrolling interest

There was income attributable to noncontrolling interest of $4 million during the three months ended June 30, 2026. There was no loss or income attributable to noncontrolling interest for the three months ended June 30, 2025.

Business Segment Results

Results by business segment were as follows (in millions):

Recorded Music

Revenues

Recorded Music revenue increased by $134 million, or 10%, to $1,488 million for the three months ended June 30, 2026 from $1,354 million for the three months ended June 30, 2025. U.S. Recorded Music revenues were $587 million and $536 million, or 39% and 40% of consolidated Recorded Music revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively. International Recorded Music revenues were $901 million and $818 million, or 61% and 60% of consolidated Recorded Music revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Recorded Music revenue was driven by higher revenue across digital, artist services and expanded-rights and physical revenues, 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):

Recorded Music cost of revenues increased by $71 million, to $777 million for the three months ended June 30, 2026 from $706 million for the three months ended June 30, 2025. 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, 2026 and June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 24% for each of the three months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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

(1) Includes depreciation expense of $10 million and $14 million for the three months ended June 30, 2026 and June 30, 2025, respectively.

Recorded Music selling, general and administrative expense decreased by $9 million, to $336 million for the three months ended June 30, 2026 from $345 million for the three months ended June 30, 2025,which includes unfavorable movements in foreign currency exchange rates of $2 million. The decreases in general and administrative expense and selling and marketing expense were largely driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business. The decrease in selling and marketing expense was partially offset by higher variable marketing spend for key releases. The increase in distribution expense was primarily driven by revenue mix from higher merchandising and physical revenues. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 23% for the three months ended June 30, 2026 from 25% for the three months ended June 30, 2025.

Operating Income and Adjusted OIBDA

Recorded Music operating income increased by $125 million to $326 million for the three months ended June 30, 2026 from $201 million for the three months ended June 30, 2025. In addition to the factors impacting Adjusted OIBDA described below, the increase in operating income was driven by decreases in restructuring and impairment charges of $63 million and depreciation expense of $4 million compared to the prior-year quarter, partially offset by higher amortization expenses of $10 million related to acquisitions of music-related assets.

Recorded Music Adjusted OIBDA increased by $56 million to $377 million for the three months ended June 30, 2026 from $321 million for the three months ended June 30, 2025, largely driven by strong operating performance and revenue growth, and savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by the impact of the Copyright Settlement of $9 million and the BMG Termination of $1 million in the prior-year quarter and unfavorable movements in foreign currency exchange rates of approximately $12 million. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 25% for the three months ended June 30, 2026 from 24% for the three months ended June 30, 2025 due to the factors noted above.

Music Publishing

Revenues

Music Publishing revenues increased by $41 million, or 12%, to $377 million for the three months ended June 30, 2026 from $336 million for the three months ended June 30, 2025. U.S. Music Publishing revenues were $194 million and $186 million, or 51% and 55% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively. International Music Publishing revenues were $183 million and $150 million, or 49% and 45% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Music Publishing revenue was driven by growth in digital, synchronization, mechanical, and performance 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):

Music Publishing cost of revenues increased by $27 million, or 13%, to $235 million for the three months ended June 30, 2026 from $208 million for the three months ended June 30, 2025. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 62% for each of the three months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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

(1) Includes depreciation expense of $2 million and $1 million for the three months ended June 30, 2026 and June 30, 2025, respectively.

Music Publishing selling, general and administrative expense increased by $2 million, or 6%, to $36 million for the three months ended June 30, 2026 from $34 million for the three months ended June 30, 2025. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for each of the three months ended June 30, 2026 and June 30, 2025.

Operating Income and Adjusted OIBDA

Music Publishing operating income increased by $11 million to $71 million for the three months ended June 30, 2026 from $60 million for the three months ended June 30, 2025 primarily driven by the same factors affecting Adjusted OIBDA discussed below.

Music Publishing Adjusted OIBDA increased by $13 million, or 14%, to $109 million for the three months ended June 30, 2026 from $96 million for the three months ended June 30, 2025, primarily driven by revenue growth and strong operating performance, partially offset by unfavorable movements in foreign currency exchange rates of approximately $5 million. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 29% for each of the three months ended June 30, 2026 and June 30, 2025.

Corporate Expenses and Eliminations

Our operating loss from corporate expenses and eliminations remained constant at $92 million for each of the three months ended June 30, 2026 and June 30, 2025, primarily driven by higher depreciation expense of $7 million due to the core financials and global revenue solution components of our new technology platform being placed into service, offset by lower non-cash stock-based compensation and other related expenses of $4 million, and savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business.

Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $9 million to $53 million for the three months ended June 30, 2026 from $44 million for the three months ended June 30, 2025, primarily due to the operating loss factors noted above.

RESULTS OF OPERATIONS

Nine Months Ended June 30, 2026 Compared with Nine Months Ended June 30, 2025

Consolidated Results

Revenues

Our revenues were composed of the following amounts (in millions):

Total Revenues

Total revenues increased by $597 million, or 12%, to $5,436 million for the nine months ended June 30, 2026 from $4,839 million for the nine months ended June 30, 2025. Recorded Music digital revenue growth was impacted by a digital revenue settlement of $12 million in the current year and $4 million in the prior year (the “DSP True-Up and Settlement Payments”), as well as $16 million of the Copyright Settlement in the prior year. Revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $22 million lower Recorded Music streaming revenue compared to the nine months ended June 30, 2025. Music Publishing revenue was impacted by $17 million of revenue in the prior year recognized in connection with historical matched royalties that were processed to date by the Mechanical Licensing Collective (the “MLC Historical Matched Royalties”). Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenues for each of the nine months ended June 30, 2026 and June 30, 2025. Prior to intersegment eliminations, U.S. and international revenues represented 42% and 58% for the nine months ended June 30, 2026, respectively, and 43% and 57% for the nine months ended June 30, 2025, respectively.

Total digital revenues after intersegment eliminations increased by $399 million, or 12%, to $3,640 million for the nine months ended June 30, 2026 from $3,241 million for the nine months ended June 30, 2025. Total streaming revenue increased 13% driven by increases in streaming revenue at Recorded Music and Music Publishing. Total digital revenues remained constant at 67% of consolidated revenues for each of the nine months ended June 30, 2026 and June 30, 2025. Prior to intersegment eliminations, total digital revenues for the nine months ended June 30, 2026 were composed of U.S. revenues of $1,627 million and international revenues of $2,014 million, or 45% and 55% of total digital revenues, respectively. Prior to intersegment eliminations, total digital

revenues 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.

Recorded Music revenues increased by $474 million to $4,348 million for the nine months ended June 30, 2026 compared to $3,874 million for the nine months ended June 30, 2025, which includes $106 million of favorable currency exchange fluctuations. U.S. Recorded Music revenues were $1,729 million and $1,565 million, or 40% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025. International Recorded Music revenues were $2,619 million and $2,309 million, or 60% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025.

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, physical, and licensing revenues. Digital revenue increased by $324 million for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025, which includes a favorable impact of currency exchange fluctuations of $74 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the Copyright Settlement of $16 million and the BMG Termination of $22 million in the prior year. Adjusted for these items, digital revenue increased $354 million, or 14%. Revenue from streaming services increased $348 million to $2,922 million for the nine months ended June 30, 2026 compared to $2,574 million for the nine months ended June 30, 2025, which includes the favorable impact of foreign currency exchange rates of $72 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the BMG Termination of $22 million in the prior year. Adjusted for these items, streaming revenue increased $362 million, or 14%. Download and other digital revenues decreased by $24 million, or 35%, to $45 million for the nine months ended June 30, 2026 from $69 million for the nine months ended June 30, 2025, primarily due to the continued shift to streaming services, and reflects the impact of the Copyright Settlement of $16 million in the prior year. Artist services and expanded-rights revenue increased by $111 million, or 22%, attributable to higher concert promotion revenue primarily in France, higher merchandising revenue and the favorable impact of foreign currency exchange rates of $15 million. Physical revenue increased by $29 million, or 7%, driven by strong U.S. releases in the current year as well as catalog and carryover success and a favorable impact of foreign currency exchange rates of $7 million, partially offset by strong releases in Korea and Japan in the prior year. Licensing revenue increased by $10 million, or 3%, primarily driven by the favorable impact of foreign currency exchange rates of $10 million. Top sellers for the nine months ended June 30, 2026 included Alex Warren, sombr, Bruno Mars, Ed Sheeran and Benson Boone.

Music Publishing revenues increased by $123 million, or 13%, to $1,092 million for the nine months ended June 30, 2026 from $969 million for the nine months ended June 30, 2025. U.S. Music Publishing revenues were $562 million and $520 million, or 51% and 54% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively. International Music Publishing revenues were $530 million and $449 million, or 49% and 46% of Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Music Publishing revenue was attributable to increases in digital revenue of $75 million, or 13%, performance revenue of $14 million, or 8%, synchronization revenue of $28 million, or 20%, and mechanical revenue of $8 million, or 17%. The increase in digital revenue was primarily driven by continued growth in streaming revenue, partially offset by the impact of the MLC Historical Matched Royalties of $17 million in the prior year. Adjusted for the impact of the MLC Historical Matched Royalties of $17 million, digital revenue increased $92 million, or 16%. Revenue from streaming services grew by $73 million, or 12%, to $665 million for the nine months ended June 30, 2026 from $592 million for the nine months ended June 30, 2025, reflecting continued market growth and the impact of new deals and renewals, and a favorable impact of foreign currency exchange rates of $11 million. The growth in performance revenue is attributable to growth from touring, radio and live events primarily 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 a $4 million impact from the prior year acquisition of Tempo. The growth in mechanical revenue is primarily driven by the impact of new deals and the timing of distributions.

Revenue by Geographical Location

U.S. revenue increased by $206 million, or 10%, to $2,291 million for the nine months ended June 30, 2026 from $2,085 million for the nine months ended June 30, 2025. U.S. Recorded Music revenue increased by $164 million, or 10%, primarily driven by an increase in digital revenue of $79 million, or 7%, which reflects higher streaming revenue of $98 million, or 9%, partially offset by lower download and other digital revenue of $19 million, or 43%, and the impacts of the DSP True-Up and Settlement Payments of $5 million in the current year, as well as the Copyright Settlement of $16 million and the BMG Termination of $15 million in the prior year. The decrease in download and other digital revenue is due to the continued shift to streaming and includes the $16 million impact of the Copyright Settlement in the prior year. U.S. Recorded Music physical revenue increased by $46 million, or 27%, driven by strong releases in the current year as well as catalog and carryover success. U.S. Recorded Music artist services and expanded-rights revenue increased by $21 million, or 18%, driven by higher merchandising revenue of approximately $26 million, partially offset by a decrease in other artists services and expanded-rights revenue, including advertising revenue. Licensing revenue increased by $18 million, or 17%, primarily driven by higher copyright infringement settlements of approximately $13 million compared to the

prior year. U.S. Music Publishing revenue increased by $42 million, or 8%, to $562 million for the nine months ended June 30, 2026 from $520 million for the nine months ended June 30, 2025. U.S. Music Publishing digital revenue increased by $15 million, attributable to higher streaming revenue of $16 million, or 5%, partially offset by a decrease in download and other digital revenue of $1 million, and the impact of the MLC Historical Matched Royalties of $17 million in the prior year. U.S. Music Publishing synchronization revenue increased by $27 million, or 31%, driven by timing of other copyright infringement settlements, higher television and commercial licensing activity and the impact of acquisitions. U.S. Music Publishing mechanical revenue increased by $2 million, or 20%, and U.S. Music Publishing performance revenue decreased $1 million, or 2%, for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025.

International revenue increased by $391 million, or 14%, to $3,149 million for the nine months ended June 30, 2026 from $2,758 million for the nine months ended June 30, 2025. Excluding the favorable impact of foreign currency exchange rates of $130 million, international revenue increased by $261 million, or 9%. International Recorded Music revenue increased by $310 million, driven by increases in digital revenue of $245 million and artist services and expanded-rights revenue of $90 million, partially offset by a decrease in physical revenue of $17 million and in licensing revenue of $8 million. International Recorded Music digital revenue increased by $245 million, attributable to higher streaming revenue of $250 million and a favorable impact of foreign currency exchange rates of $72 million, partially offset by lower download and other digital revenue of $5 million, and the impacts of the DSP True-Up and Settlement Payments of $7 million in the current year and $4 million in the prior year, as well as the BMG Termination of $7 million in the prior year. International Recorded Music artist services and expanded-rights revenue increased by $90 million, primarily due to higher concert promotion revenue in France. International Recorded Music physical revenue decreased by $17 million, driven by strong releases primarily in Korea and Japan in the prior year, partially offset by a favorable impact of foreign currency exchange rates of $7 million, and international Recorded Music licensing revenue decreased by $8 million primarily due to higher licensing activity in the prior year. International Music Publishing revenue increased by $81 million, or 18%, to $530 million for the nine months ended June 30, 2026 from $449 million for the nine months ended June 30, 2025. This was driven by increases in digital revenue of $60 million, performance revenue of $15 million due to higher concert, touring and live events revenue, mechanical revenue of $6 million, and synchronization revenue of $1 million. International Music Publishing digital growth is primarily driven by streaming revenue growth of $57 million, or 24%.

Cost of revenues

Our cost of revenues was composed of the following amounts (in millions):

Artist and repertoire costs increased by $225 million, to $1,914 million for the nine months ended June 30, 2026 from $1,689 million for the nine months ended June 30, 2025. Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the nine months ended June 30, 2026 and June 30, 2025.

Product costs increased by $104 million, to $1,013 million for the nine months ended June 30, 2026 from $909 million for the nine months ended June 30, 2025. Product costs as a percentage of revenue remained constant at 19% for each of the nine months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expenses

Our selling, general and administrative expenses were composed of the following amounts (in millions):

(1) Includes depreciation expense of $95 million and $86 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.

Total selling, general and administrative expense decreased by $13 million, to $1,382 million for the nine months ended June 30, 2026 from $1,395 million for the nine months ended June 30, 2025, driven by savings from the Company’s restructuring plans, of which a portion has been reinvested into the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of approximately $25 million. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 25% for the nine months ended June 30, 2026, from 29% for the nine months ended June 30, 2025 due to the factors noted below.

General and administrative expense decreased by $43 million to $799 million for the nine months ended June 30, 2026 from $842 million for the nine months ended June 30, 2025. The decrease in general and administrative expense was driven by savings from the Company’s restructuring plans, of which a portion has been reinvested into the Company’s business and lower non-cash stock-based compensation expense of $17 million, partially offset by higher depreciation expense of $9 million related to technology assets being placed into service, including the core financials component of our new technology platform. Expressed as a percentage of revenue, general and administrative expense decreased to 15% for the nine months ended June 30, 2026 from 17% for the nine months ended June 30, 2025 due to the factors noted above.

Selling and marketing expense increased by $4 million, or 1%, to $486 million for the nine months ended June 30, 2026 from $482 million for the nine months ended June 30, 2025. Expressed as a percentage of revenue, selling and marketing expense decreased to 9% for the nine months ended June 30, 2026, from 10% for the nine months ended June 30, 2025, primarily due to revenue growth and savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.

Distribution expense increased by $26 million to $97 million for the nine months ended June 30, 2026 from $71 million for the nine months ended June 30, 2025. Expressed as a percentage of revenue, distribution expense increased to 2% for the nine months ended June 30, 2026, from 1% for the nine months ended June 30, 2025 primarily due to revenue mix, including higher merchandising and physical revenues.

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):

Adjusted OIBDA

Adjusted OIBDA increased by $254 million to $1,293 million for the nine months ended June 30, 2026 as compared to $1,039 million for the nine months ended June 30, 2025, driven by revenue mix, the impact of the DSP True-Up and Settlement Payments of $7 million in the current year, and savings from the Company’s strategic restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by the impacts of the DSP True-Up and Settlement Payments of $3 million, the $9 million impact of the Copyright Settlement, the $4 million impact of the MLC Historical Matched Royalties and the $2 million impact of the BMG Termination in the prior year and unfavorable movements in currency exchange rates of approximately $4 million. Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 24% for the nine months ended June 30, 2026 from 21% for the nine months ended June 30, 2025.

Non-cash stock-based compensation and other related costs

Our non-cash stock-based compensation and other related costs decreased by $17 million to $32 million for the nine months ended June 30, 2026 from $49 million for the nine months ended June 30, 2025, primarily driven by the favorable impact of forfeitures in the current year.

Net loss on divestitures

Net loss on divestitures during the nine months ended June 30, 2026 includes a pre-tax loss of $5 million in connection with the divestiture of certain assets. There was no net loss on divestitures during the nine months ended June 30, 2025.

Executive transition costs

There were no executive transition costs for the nine months ended June 30, 2026. 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 during fiscal 2025.

Transformation initiatives and other related costs

Our transformation initiatives and other related costs decreased by $15 million to $39 million for the nine months ended June 30, 2026 from $54 million for the nine months ended June 30, 2025 primarily driven by lower project costs associated with our finance transformation.

Restructuring and Impairments

Our restructuring and impairment charges decreased to $47 million for the nine months ended June 30, 2026 from $109 million for the nine months ended June 30, 2025. The current year includes an additional impairment charge of $14 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025, while the prior year includes the initial impairment charge of $70 million for long-lived assets associated with EMP.

Depreciation expense

Our depreciation expense increased by $9 million to $95 million for the nine months ended June 30, 2026 from $86 million for the nine months ended June 30, 2025. This increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.

Amortization expense

Our amortization expense increased by $32 million, or 17%, to $218 million for the nine months ended June 30, 2026 from $186 million for the nine months ended June 30, 2025. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by a decrease of approximately $4 million from the classification of EMP intangible assets as held for sale.

Operating income

Our operating income increased by $306 million to $857 million for the nine months ended June 30, 2026 from $551 million for the nine months ended June 30, 2025. The increase in operating income was due to the same factors affecting Adjusted OIBDA discussed above, partially offset by higher amortization expenses of $32 million and higher depreciation expenses of $9 million, as noted above.

Interest expense, net

Our interest expense, net, increased to $135 million for the nine months ended June 30, 2026 from $119 million for the nine months ended June 30, 2025, primarily due to interest expense on incremental debt of approximately $8 million related to the Beethoven Credit Agreement and interest expense on incremental debt of approximately $4 million related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo Music in the prior year, partially offset by lower interest rates on variable rate debt in the current year.

Other (income) expense

Other income for the nine months ended June 30, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $24 million, currency exchange gains on our intercompany loans of $12 million, and realized and unrealized losses on hedging activity of $2 million. This compares to foreign currency losses on our Euro-denominated debt of $43 million, currency exchange losses on our intercompany loans of $43 million, realized gains on the sale of an investment of $29 million, and a realized and unrealized gain on hedging activity of $1 million for the nine months ended June 30, 2025.

Loss on extinguishment of debt

We recorded a loss on extinguishment of debt in the amount of $7 million for the nine months ended June 30, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs in connection with the refinancing of our Tranche B Term Loans. There was no loss on extinguishment of debt for the nine months ended June 30, 2025.

Income tax expense

Our income tax expense increased by $88 million to $211 million for the nine months ended June 30, 2026 from $123 million for the nine months ended June 30, 2025. The increase of $88 million in income tax expense is primarily due to an increase in pre-tax

income in the current year, taxable gain on the Company’s sale of certain recorded music catalog rights to Beethoven JV, and an $18 million smaller benefit from EMP impairment in the current year. These charges were partially offset by the tax benefit associated with partial release of valuation allowance on EMP.

Net income

Net income increased by $295 million to $556 million for the nine months ended June 30, 2026 from $261 million for the nine months ended June 30, 2025 as a result of the factors described above.

Noncontrolling interest

There was income attributable to noncontrolling interest of $7 million for the nine months ended June 30, 2026 compared to a loss of $5 million for the nine months ended June 30, 2025.

Business Segment Results

Results by business segment were as follows (in millions):

Recorded Music

Revenues

Recorded Music revenues increased by $474 million to $4,348 million for the nine months ended June 30, 2026 compared to $3,874 million for the nine months ended June 30, 2025. U.S. Recorded Music revenues were $1,729 million and $1,565 million, or 40% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025. International

Recorded Music revenues were $2,619 million and $2,309 million, or 60% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025.

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, physical and licensing revenues, 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):

Recorded Music cost of revenues increased by $253 million, to $2,244 million for the nine months ended June 30, 2026 from $1,991 million for the nine months ended June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the nine months ended June 30, 2026 and June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 23% for each of the nine months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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

(1) Includes depreciation expense of $32 million and $42 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.

Recorded Music selling, general and administrative expense decreased by $22 million, to $1,013 million for the nine months ended June 30, 2026 from $1,035 million for the nine months ended June 30, 2025, which includes unfavorable movements in foreign currency exchange rates of $23 million. The decrease in general and administrative expense was primarily due to savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business, and lower non-cash stock-based compensation and other related expenses of $21 million. The increase in selling and marketing expense was primarily due to higher variable marketing spend for key releases. The increase in distribution expense was primarily due to revenue mix from higher merchandising and physical revenues. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 23% for the nine months ended June 30, 2026 from 27% for the nine months ended June 30, 2025.

Operating Income and Adjusted OIBDA

Recorded Music operating income increased by $301 million to $943 million for the nine months ended June 30, 2026 from $642 million for the nine months ended June 30, 2025. In addition to the factors impacting Recorded Music Adjusted OIBDA noted below, the increase in operating income was driven by a decrease in restructuring and non-cash impairment charges of $76 million, lower non-cash stock-based compensation expense and other related costs of $21 million, and lower depreciation expense of $10 million compared to the prior year, partially offset by higher amortization expenses of $18 million related to acquisitions of music-related assets.

Recorded Music Adjusted OIBDA increased by $212 million, to $1,126 million for the nine months ended June 30, 2026 from $914 million for the nine months ended June 30, 2025, largely attributable to strong operating performance and revenue growth,

savings from the Company’s strategic restructuring plans, of which a portion has been reinvested in the Company’s business and the impact of the DSP True-Up and Settlement Payments of $7 million in the current year, partially offset by the $3 million impact of the DSP True-Up and Settlement Payments, the $9 million impact of the Copyright Settlement and $2 million impact of the BMG Termination in the prior year, and unfavorable movements in foreign currency exchange rates of approximately $2 million. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 26% for the nine months ended June 30, 2026 from 24% for the nine months ended June 30, 2025, due to the factors noted above.

Music Publishing

Revenues

Music Publishing revenues increased by $123 million, or 13%, to $1,092 million for the nine months ended June 30, 2026 from $969 million for the nine months ended June 30, 2025. U.S. Music Publishing revenues were $562 million and $520 million, or 51% and 54% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively. International Music Publishing revenues were $530 million and $449 million, or 49% and 46% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Music Publishing revenue was driven by growth across digital, synchronization, performance 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):

Music Publishing cost of revenues increased by $75 million, or 12%, to $687 million for the nine months ended June 30, 2026 from $612 million for the nine months ended June 30, 2025. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the nine months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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

(1) Includes depreciation expense of $3 million and $4 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.

Music Publishing selling, general and administrative expense increased to $104 million for the nine months ended June 30, 2026 from $101 million for the nine months ended June 30, 2025. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for each of the nine months ended June 30, 2026 and June 30, 2025.

Operating Income and Adjusted OIBDA

Music Publishing operating income increased by $30 million to $197 million for the nine months ended June 30, 2026 from $167 million operating income for the nine months ended June 30, 2025 largely due to the factors that impacted Music Publishing Adjusted OIBDA noted below, coupled with lower depreciation expenses of $1 million, partially offset by higher amortization expenses of $15 million related to acquisitions.

Music Publishing Adjusted OIBDA increased by $44 million to $308 million for the nine months ended June 30, 2026 from $264 million for the nine months ended June 30, 2025, primarily driven by strong operating performance and revenue growth, partially offset by the $4 million impact of the MLC Historical Matched Royalties in the prior year and unfavorable movements in foreign currency exchange rates of approximately $1 million. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 28% for the nine months ended June 30, 2026 from 27% for the nine months ended June 30, 2025.

Corporate Expenses and Eliminations

Our operating loss from corporate expenses and eliminations increased by $25 million to $283 million for the nine months ended June 30, 2026 from $258 million for the nine months ended June 30, 2025, primarily due to higher depreciation expense of $20 million, an increase in restructuring and impairment costs of $14 million, a net loss on divestitures of $5 million, and higher non-cash stock-based compensation and other related expenses of $4 million, partially offset by lower expenses related to transformation initiatives and related costs of $15 million.

Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $2 million to $141 million for the nine months ended June 30, 2026 from $139 million for the nine months ended June 30, 2025, primarily due to the operating loss factors noted above.

FINANCIAL CONDITION AND LIQUIDITY

Financial Condition at June 30, 2026

At June 30, 2026, we had $4.710 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $618 million of cash and equivalents (net debt of $4.092 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $854 million of Warner Music Group Corp. equity. This compares to $4.365 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $532 million of cash and equivalents (net debt of $3.833 billion) and $647 million of Warner Music Group Corp. equity at September 30, 2025.

Cash Flows

The following table summarizes our historical cash flows (in millions). The financial data for the nine months ended June 30, 2026 and June 30, 2025 are unaudited and have been derived from our condensed consolidated interim financial statements included elsewhere herein.

Operating Activities

Cash provided by operating activities was $708 million for the nine months ended June 30, 2026 as compared with cash provided by operating activities of $447 million for the nine months ended June 30, 2025. The $261 million increase in cash provided by operating activities was largely a result of strong operating performance.

Investing Activities

Cash used in investing activities was $674 million for the nine months ended June 30, 2026 as compared with cash used in investing activities of $273 million for the nine months ended June 30, 2025. The $674 million of cash used in investing activities in the nine months ended June 30, 2026 consisted of $106 million relating to investments and acquisitions of businesses, $505 million to acquire music-related assets and $75 million relating to capital expenditures, partially offset by $10 million of proceeds from net divestitures and $2 million of proceeds from the sale of investments. 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.

Financing Activities

Cash provided by financing activities was $59 million for the nine months ended June 30, 2026 as compared with cash used in financing activities of $344 million for the nine months ended June 30, 2025. The $59 million of cash provided by financing activities for the nine months ended June 30, 2026 consisted of proceeds from the Beethoven Credit Agreement of $370 million and contributions from redeemable noncontrolling interest holder of $135 million, partially offset by dividends paid of $300 million, payment of deferred consideration of $47 million, distributions to noncontrolling interest holders of $9 million, taxes paid related to net share settlement of restricted stock units and common stock of $27 million, common stock repurchased and retired of $48 million, and deferred financing costs paid of $14 million, repayment of the Term Loan Mortgage of $1 million. 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.

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 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 from the date of this filing.

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. In September 2025, 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 4.0% as of June 30, 2026. Our nearest-term maturity date is in 2028. Subject to market conditions, we continue to take opportunistic steps to extend our maturity dates, reduce related interest expense and make other changes. 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. We did not repurchase any common shares during the three months ended June 30, 2026. The Company repurchased and retired 1,670,500 shares for $48 million during the nine months ended June 30, 2026. As of June 30, 2026, approximately $37 million of the $100 million share repurchase authorization remained available.

Existing Debt as of June 30, 2026

As of June 30, 2026, our long-term debt was as follows (in millions):

(a)Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2026. There were no loans outstanding under the Revolving Credit Facility at June 30, 2026.

(b)Reflects $750 million of commitments under the Beethoven Credit Agreement. There were $370 million in loans outstanding under the Beethoven Credit Agreement at June 30, 2026. Loans outstanding under the Beethoven Credit Agreement are secured only by certain music rights owned by Beethoven JV 1, LLC, a Delaware limited liability company (“Beethoven”), and are nonrecourse to the Company and its subsidiaries, other than Beethoven.

(c)The Asset-Based Notes are secured only by certain music rights owned by Tempo Music and are nonrecourse to the Company and its subsidiaries, other than Tempo Music.

Pursuant to the Amendment, WMGCo and BainCo have committed to increase their respective initial equity commitment amounts by $100 million each.

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, 2025.

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 7, 2026, 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, which was paid to stockholders on June 2, 2026. The Company paid an aggregate of approximately $100 million and $300 million, or $0.19 and $0.57 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2026, respectively.

On August 5, 2026, the Company’s board of directors declared a cash dividend of $0.20 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 1, 2026, to stockholders of record as of the close of business on August 20, 2026.

Covenant Compliance

The Company was in compliance with its covenants under its outstanding notes, the Credit Agreement and the Asset-Based Notes as of June 30, 2026.

The Credit Agreement contains a covenant that is tied to a leverage ratio based on EBITDA, which is defined under the Credit Agreement. So long as Tranche A Term Loans remain outstanding and/or during a collateral suspension period, we are required to meet the leverage ratio test at the end of each fiscal quarter. Other than during a collateral suspension period and so long as no Tranche A Term Loans remain outstanding, our ability to borrow funds under the Revolving Credit Facility may depend on 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. EBITDA as defined in the Credit Agreement is based on Consolidated Net Income (as defined in the Credit Agreement), 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 Credit Agreement, 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 Credit Agreement 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 Secured Notes Indenture uses 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 Credit Agreement.

EBITDA as defined in the Credit Agreement (referred to in this section as “Adjusted EBITDA”) is presented herein because it is a material component of the leverage ratio contained in the Credit Agreement. Non-compliance with the leverage ratio could result in a default under the Credit Agreement (or, if during a collateral suspension period and so long as no Tranche A Term Loans remain outstanding, 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 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.

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, 2026, for the twelve months ended June 30, 2025 and for the three months ended June 30, 2026 and June 30, 2025. 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 Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2026. The terms and related calculations are defined in the Credit Agreement. All amounts in the reconciliation below reflect Acquisition Corp. (in millions, except ratios):

(a)Reflects severance costs and other restructuring related expenses, including those related to the Company’s restructuring plans.

(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 $10 million and $49 million related to our finance transformation for the three and twelve months ended June 30, 2026, respectively, as well as $19 million and $74 million for the three and twelve months ended June 30, 2025, 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 Company’s restructuring plans as well as an additional impairment charge of $3 million in the quarter for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

(f)Tempo Music and Beethoven are both bona fide joint ventures, and are therefore excluded from the calculation of net income and Adjusted EBITDA. Similarly, the Asset-Based Notes issued by a subsidiary of Tempo Music and the Beethoven Credit Facility are not included in our indebtedness for purposes of calculating the Leverage Ratio.

(g)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, 2026.

(h)Reflects the balance of senior secured debt at Acquisition Corp. of approximately $4.044 billion less cash of $600 million, which excludes cash and debt held at Tempo Music and Beethoven, which are both bona fide joint ventures.

(i)Reflects the ratio of Total Indebtedness, including Revolving Credit Indebtedness, to Adjusted EBITDA. This is calculated net of cash and equivalents of the Company as of June 30, 2026 not exceeding $600 million in accordance with the Credit Agreement. During a collateral suspension period, whether or not there are any Tranche A Term Loans outstanding, Total Indebtedness to EBITDA Ratio may not exceed 4.00:1.00. Other than during a collateral suspension period, so long as the Tranche A Term Loans are outstanding, Senior Secured Indebtedness to EBITDA Ratio may not exceed 5.00:1.00. Other than during a collateral suspension period, and if no Tranche A Term Loans are outstanding, and only if the outstanding aggregate principal amount of borrowings under the Revolving Credit Facility and drawings under letters of credit which

have not been reimbursed under the Revolving Credit Facility is greater than $140 million at the end of a fiscal quarter, Senior Secured Indebtedness to EBITDA Ratio may not exceed 5.00:1.00.

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 Tranche A Term Loans. 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 Credit Agreement or our outstanding debt or debt securities with existing cash and/or with funds provided from additional borrowings.

Item 3. Item

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As discussed in Note 16 to our audited consolidated financial statements for the fiscal year ended September 30, 2025, 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, 2026, other than as described below, there have been no material changes to the Company’s exposure to market risk since September 30, 2025.

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, 2026, the Company had outstanding foreign currency forward exchange contracts for the sale of $524 million and the purchase of $292 million of foreign currencies at fixed rates. Subsequent to June 30, 2026, 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, 2026, 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 $23 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 $4.746 billion of principal debt outstanding at June 30, 2026, of which $1.681 billion was variable-rate debt and $3.065 billion was fixed-rate debt. As such, we are exposed to changes in interest rates. At June 30, 2026, 65% of the Company’s debt was at a fixed rate. In addition, as of June 30, 2026, 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, 2026, the fair value of the Company’s fixed-rate and variable-rate debt was approximately $4.609 billion. Further, as of June 30, 2026, 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 $25 million or increase the fair value of the fixed-rate debt by approximately $25 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.

ITEM 4. CONTROLS AND PROCEDURES

Item 1. Item

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. Item

ITEM 1A. RISK FACTORS

In addition to the other information contained in this Quarterly Report on Form 10-Q, certain risk factors should be considered carefully in evaluating our business. A wide range of risks may affect our business and financial results, now and in the future. We consider the risks described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and the risk set forth in Part II, Item 1A “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 to be the most significant. There may be other currently unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results.

Item 2. Item

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, 2026:

Item 3. Item

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4. Item

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. Item

ITEM 5. OTHER INFORMATION

On July 31, 2026, Armin Zerza stepped down for personal reasons as Chief Operating Officer and Chief Financial Officer of the Company. Pursuant to the terms of a separation agreement between the Company and Mr. Zerza dated July 31, 2026, Mr. Zerza’s departure will be treated as if it were a termination without cause under his employment agreement. Mr. Zerza will receive: (i) a bonus of $3.6 million, which includes 100% of his target bonus payable as if it were a termination without cause, as well as the other payments and benefits payable to him under his employment agreement and equity incentive award agreements as if it were a termination by the Company without cause and (ii) continued payment of his base salary and company-provided benefits through September 30, 2026.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the separation agreement, a copy of which will be filed as an exhibit to the Company’s Form 10-K for the year ended September 30, 2026.

Item 6. Item

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.

• 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.

† 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.