What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 160 added, 124 removed, 568 unchanged (33% of the section changed)

38 unchanged sentences

Class A common stock, $ 0.001 par value;

1,000,000 shares authorized, 145,032 and 142,559 shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively

1,000,000 shares authorized, 145,887 and 142,559 shares issued and outstanding as of June 30, 2025 and September 30, 2024, respectively

Class B common stock, $ 0.001 par value;

1,000,000 shares authorized, 375,380 issued and outstanding as of March 31, 2025 and September 30, 2024, respectively

1,000,000 shares authorized, 375,380 issued and outstanding as of June 30, 2025 and September 30, 2024, respectively

Additional paid-in capital 2,102 2,077

11 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2024 2025 2024

11 unchanged sentences

Other (expense) income ( 137 ) 4 ( 48 ) ( 9 )

Income before income taxes 65 114 395 379

(Loss) income before income taxes ( 11 ) 171 384 550

Income tax expense ( 5 ) ( 30 ) ( 123 ) ( 120 )

Net income 36 96 277 289

Net (loss) income ( 16 ) 141 261 430

Income attributable to noncontrolling interest — ( 2 ) ( 5 ) ( 36 )

Net income attributable to Warner Music Group Corp.

Net (loss) income attributable to Warner Music Group Corp.

$ ( 16 ) $ 139 $ 256 $ 394

Net income per share attributable to common stockholders:

Net income (loss) per share attributable to common stockholders:

Class A – Basic and Diluted $ ( 0.03 ) $ 0.27 $ 0.49 $ 0.75

10 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2024 2025 2024

Net income $ 36 $ 96 $ 277 $ 289

Net (loss) income $ ( 16 ) $ 141 $ 261 $ 430

Other comprehensive income (loss), net of tax:

Foreign currency adjustment 118 ( 10 ) 73 13

Deferred (loss) gain on derivative financial instruments — — — ( 1 )

Deferred loss on derivative financial instruments

Minimum pension liability

8 unchanged sentences

(In millions)

Six Months Ended

Nine Months Ended

Cash flows from operating activities

2 unchanged sentences

Depreciation and amortization 272 244

Unrealized (gains) losses and remeasurement of foreign-denominated loans and foreign currency forward exchange contracts ( 40 ) 18

Unrealized losses and remeasurement of foreign-denominated loans and foreign currency forward exchange contracts

Deferred income taxes 7 29

Net loss (gain) on investments

Net loss (gain) on divestitures

Net gain on investments

Net gain on divestitures

Non-cash interest expense 4 5

11 unchanged sentences

Deferred revenue 24 ( 205 )

Other balance sheet changes ( 30 ) ( 9 )

Other balance sheet changes, net

( 65 ) ( 13 )

Net cash provided by operating activities 447 450

11 unchanged sentences

Deferred financing costs paid — ( 2 )

Repayment of Term Loan Mortgage ( 1 ) —

Distribution to noncontrolling interest holders ( 8 ) ( 6 )

13 unchanged sentences

(In millions, except share amounts which are reflected in thousands, and per share data)

Six Months Ended March 31, 2025

Nine Months Ended June 30, 2025

Common Stock Class B

8 unchanged sentences

Net income — — — — — 256 — 256 5 261

Other comprehensive loss, net of tax — — — — — — ( 45 ) ( 45 ) — ( 45 )

Other comprehensive income, net of tax — — — — — — 73 73 — 73

Dividends ($ 0.54 per share)

7 unchanged sentences

Other — — — — ( 2 ) — — ( 2 ) ( 5 ) ( 7 )

Balance at March 31, 2025 145,032 $ — 375,380 $ 1 $ 2,088 $ ( 1,230 ) $ ( 292 ) $ 567 $ 223 $ 790

Three Months Ended March 31, 2025

Balance at June 30, 2025 145,887 $ — 375,380 $ 1 $ 2,102 $ ( 1,340 ) $ ( 174 ) $ 589 $ 223 $ 812

Three Months Ended June 30, 2025

Common Stock Class B

6 unchanged sentences

Shares Value Shares Value

Balance at December 31, 2024 144,301 $ — 375,380 $ 1 $ 2,091 $ ( 1,171 ) $ ( 376 ) $ 545 $ 152 $ 697

Net income — — — — — 36 — 36 — 36

Balance at March 31, 2025 145,032 $ — 375,380 $ 1 $ 2,088 $ ( 1,230 ) $ ( 292 ) $ 567 $ 223 $ 790

Net loss — — — — — ( 16 ) — ( 16 ) — ( 16 )

Other comprehensive income, net of tax — — — — — — 118 118 — 118

2 unchanged sentences

Stock-based compensation expense — — — — 15 — — 15 — 15

Acquisition of noncontrolling interests — — — — — — — — 74 74

Vesting of restricted stock units, net of shares withheld for employee taxes 6 — — — — — — — — —

Conversion of Class B Shares to Class A shares — — — — — — — — — —

Shares issued under Omnibus Incentive Plan — — — — — — — — — —

Other — — — — — — — — ( 3 ) ( 3 )

Balance at March 31, 2025 145,032 $ — 375,380 $ 1 $ 2,088 $ ( 1,230 ) $ ( 292 ) $ 567 $ 223 $ 790

Six Months Ended March 31, 2024

Shares issued under the Plan 869 — — — — — — — — —

Common shares repurchased and retired ( 20 ) — — — ( 1 ) — — ( 1 ) — ( 1 )

Balance at June 30, 2025 145,887 $ — 375,380 $ 1 $ 2,102 $ ( 1,340 ) $ ( 174 ) $ 589 $ 223 $ 812

Nine Months Ended June 30, 2024

Common Stock Class B

14 unchanged sentences

Distribution to noncontrolling interest holders — — — — — — — — ( 6 ) ( 6 )

Acquisition of noncontrolling interests — — — — — — — — ( 1 ) ( 1 )

Shares issued under the Plan 1,738 — — — — — — — — —

2 unchanged sentences

Shares issued under Omnibus Incentive Plan 185 — — — ( 5 ) — — ( 5 ) — ( 5 )

Balance at March 31, 2024 141,596 $ — 376,315 $ 1 $ 2,043 $ ( 1,310 ) $ ( 301 ) $ 433 $ 152 $ 585

Three Months Ended March 31, 2024

Balance at June 30, 2024 141,603 $ — 376,315 $ 1 $ 2,053 $ ( 1,260 ) $ ( 311 ) $ 483 $ 152 $ 635

Three Months Ended June 30, 2024

Common Stock Class B

6 unchanged sentences

Shares Value Shares Value

Balance at December 31, 2023 140,637 $ — 377,103 $ 1 $ 2,039 $ ( 1,317 ) $ ( 260 ) $ 463 $ 153 $ 616

Balance at March 31, 2024 141,596 $ — 376,315 $ 1 $ 2,043 $ ( 1,310 ) $ ( 301 ) $ 433 $ 152 $ 585

Net income — — — — — 139 — 139 2 141

5 unchanged sentences

Distribution to noncontrolling interest holders — — — — — — — — ( 1 ) ( 1 )

Shares issued under the Plan

Acquisition of noncontrolling interests

— — — — — — — — ( 1 ) ( 1 )

Exchange of Class B shares for Class A shares 788 — ( 788 ) — — — — — — —

Shares issued under Omnibus Incentive Plan 7 — — — — — — — — —

Balance at March 31, 2024 141,596 $ — 376,315 $ 1 $ 2,043 $ ( 1,310 ) $ ( 301 ) $ 433 $ 152 $ 585

Balance at June 30, 2024 141,603 $ — 376,315 $ 1 $ 2,053 $ ( 1,260 ) $ ( 311 ) $ 483 $ 152 $ 635

See accompanying notes

24 unchanged sentences

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 six months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.

Operating results for the three and nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.

The consolidated balance sheet at September 30, 2024 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S.

7 unchanged sentences

If an entity is not deemed to be a VIE, the Company consolidates the entity if the Company has a controlling voting interest.

As of March 31, 2025 and September 30, 2024, there were approximately $ 70 million and $ 77 million of assets, respectively, related to VIEs included in our condensed consolidated balance sheets.

As of March 31, 2025 and September 30, 2024, there were approximately $ 2 million of liabilities related to VIEs included in our condensed consolidated balance sheets.

As of June 30, 2025 and September 30, 2024, there were approximately $ 68 million and $ 77 million of assets, respectively, related to VIEs included in our condensed consolidated balance sheets.

As of June 30, 2025 and September 30, 2024, there were approximately $ 2 million of liabilities related to VIEs included in our condensed consolidated balance sheets.

The Company has performed a review of all subsequent events through the date the financial statements were issued and has determined that no additional disclosures are necessary.

27 unchanged sentences

Diluted earnings per share is computed by dividing net income available to each class of stock, less earnings available to participating securities, divided by the weighted average number of outstanding common shares, plus dilutive potential common shares, which is calculated using the treasury-stock method.

The potentially dilutive common shares did not have a dilutive effect on the Company’s EPS calculation for the three and six months ended March 31, 2025 and 2024.

The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three and six months ended March 31, 2025 and 2024 (in millions, except share amounts, which are reflected in thousands, and per share data):

Three Months Ended March 31,

The potentially dilutive common shares did not have a dilutive effect on the Company’s EPS calculation for the three and nine months ended June 30, 2025 and 2024.

The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three and nine months ended June 30, 2025 and 2024 (in millions, except share amounts, which are reflected in thousands, and per share data):

Three Months Ended June 30,

Class A Class B Class A Class B

Basic and Diluted EPS:

Net income attributable to Warner Music Group Corp.

Net income (loss) attributable to Warner Music Group Corp.

$ ( 4 ) $ ( 12 ) $ 39 $ 100

Net income attributable to participating securities (a)

Net income attributable to common stockholders $ 10 $ 26 $ 26 $ 69

Net loss attributable to participating securities (a)

Net income (loss) attributable to common stockholders

$ ( 4 ) $ ( 12 ) $ 37 $ 100

Weighted average shares outstanding 145,878 375,380 141,568 376,315

Basic and Diluted EPS $ 0.07 $ 0.07 $ 0.18 $ 0.18

Six Months Ended March 31,

Basic and Diluted Earnings (Loss) Per Share

$ ( 0.03 ) $ ( 0.03 ) $ 0.27 $ 0.27

Nine Months Ended June 30,

Class A Class B Class A Class B

9 unchanged sentences

(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.

Revenue Recognition

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2024 2025 2024

29 unchanged sentences

Sales Returns and Uncollectible Accounts

Based on management’s analysis of sales returns, refund liabilities of $ 17 million and $ 20 million were established at March 31, 2025 and September 30, 2024, respectively.

Based on management’s analysis of estimated credit losses, reserves of $ 23 million and $ 26 million were established at March 31, 2025 and September 30, 2024, respectively.

Based on management’s analysis of sales returns, refund liabilities of $ 16 million and $ 20 million were established at June 30, 2025 and September 30, 2024, respectively.

Based on management’s analysis of estimated credit losses, reserves of $ 24 million and $ 26 million were established at June 30, 2025 and September 30, 2024, respectively.

Deferred Revenue

Deferred revenue increased by $ 436 million during the six months ended March 31, 2025 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period.

Revenues of $ 146 million were recognized during the six months ended March 31, 2025 related to the balance of deferred revenue at September 30, 2024.

Deferred revenue increased by $ 845 million during the nine months ended June 30, 2025 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period.

Revenues of $ 197 million were recognized during the nine months ended June 30, 2025 related to the balance of deferred revenue at September 30, 2024.

There were no other significant changes to deferred revenue during the reporting period.

Performance Obligations

For the three months ended March 31, 2025 and March 31, 2024, the Company recognized revenue of $ 17 million and $ 44 million, respectively, from performance obligations satisfied in previous periods.

For the six months ended March 31, 2025 and March 31, 2024, the Company recognized revenue of $ 57 million and $ 74 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 March 31, 2025 are as follows:

For the three months ended June 30, 2025 and June 30, 2024, the Company recognized revenue of $ 10 million and $ 35 million, respectively, from performance obligations satisfied in previous periods.

For the nine months ended June 30, 2025 and June 30, 2024, the Company recognized revenue of $ 67 million and $ 109 million, respectively, from performance obligations satisfied in previous periods.

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

Thereafter Total

10 unchanged sentences

Balances at September 30, 2024 $ ( 244 ) $ ( 3 ) $ ( 247 )

Other comprehensive loss ( 45 ) — ( 45 )

Balances at March 31, 2025 $ ( 289 ) $ ( 3 ) $ ( 292 )

Other comprehensive income 73 — 73

Balances at June 30, 2025 $ ( 171 ) $ ( 3 ) $ ( 174 )

______________________________________

7 unchanged sentences

Other adjustments (a) 21 — 21

Balances at March 31, 2025 $ 1,567 $ 464 $ 2,031

Balances at June 30, 2025 $ 1,600 $ 464 $ 2,064

______________________________________

(a) Other adjustments during the six months ended March 31, 2025 represent foreign currency movements.

(a) Other adjustments during the nine months ended June 30, 2025 represent foreign currency movements.

The Company performs its annual goodwill impairment test in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”) during the fourth quarter of each fiscal year as of July 1.

3 unchanged sentences

Intangible assets consist of the following:

Weighted-Average Useful Life March 31,

Weighted-Average Useful Life June 30,

2025 September 30,

12 unchanged sentences

Total net intangible assets $ 2,918 $ 2,511

The increase in net intangible assets during the six months ended March 31, 2025 is primarily related to the acquisition of Tempo Music Holdings, LLC (“Tempo”) which is further described below.

Additionally, the Company completed various business combinations during the six months ended March 31, 2025 which resulted in the recognition of intangible assets with a preliminary estimated fair value of $ 38 million in the aggregate within recorded music catalogs, artist and songwriter contracts, trademarks, and other intangibles.

The increase in net intangible assets was partially offset by unfavorable foreign currency movements.

The increase in net intangible assets during the nine months ended June 30, 2025 is primarily related to the acquisition of Tempo Music Holdings, LLC (“Tempo”) which is further described below.

Additionally, the Company completed various business combinations during the nine months ended June 30, 2025 which resulted in the recognition of intangible assets with a preliminary estimated fair value of $ 39 million in the aggregate within recorded music catalogs, artist and songwriter contracts, trademarks, and other intangibles.

The increase in net intangible assets was partially offset by the impairment of trademarks and other intangible assets of $ 29 million, in the aggregate, within the Recorded Music segment .

On February 5, 2025, WMG Tempo Holdco LLC, a wholly owned subsidiary of Acquisition Corp.

6 unchanged sentences

Debt Capitalization

As of March 31, 2025, our long-term debt consists of the following:

As of June 30, 2025, our long-term debt consists of the following:

2025 September 30,

17 unchanged sentences

______________________________________

(a) Reflects $ 350 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $ 2 million as of March 31, 2025 and September 30, 2024.

There were no loans outstanding under the Revolving Credit Facility as of March 31, 2025 and September 30, 2024.

(a) Reflects $ 350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2025 and September 30, 2024.

There were no loans outstanding under the Revolving Credit Facility as of June 30, 2025 and September 30, 2024.

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

2 unchanged sentences

is party to and the borrower under a $ 1,295 million senior secured term loan credit facility, pursuant to a credit agreement dated November 1, 2012, as amended or supplemented (the “Senior Term Loan Credit Agreement”) with JPMorgan Chase Bank NA, as administrative agent and collateral agent, and the other financial institutions and lenders from time to time party thereto (the “Senior Term Loan Facility”).

Additionally, as of March 31, 2025 Acquisition Corp.

Additionally, as of June 30, 2025 Acquisition Corp.

had issued and outstanding the 2.750 % Senior Secured Notes due 2028, the 3.750 % Senior Secured Notes due 2029, the 3.875 % Senior Secured Notes due 2030, the 2.250 % Senior Secured Notes due 2031 and the 3.000 % Senior Secured Notes due 2031 (together, the “Acquisition Corp.

9 unchanged sentences

Senior Credit Facilities, including the Revolving Credit Facility (as defined below) and the Senior Term Loan Facility, should Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increase above 3.50 :1.00 and the term loans not achieve an investment grade rating, the covenants under the Revolving Credit Facility, which are currently suspended, will be reinstated and the ability of the Company and Holdings to obtain funds from their subsidiaries will be restricted by the Revolving Credit Facility.

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of March 31, 2025 .

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of June 30, 2025 .

Fiscal 2025 Transactions

3 unchanged sentences

Principal and interest are payable in equal semi-annual installments.

Beethoven Credit Agreement

On June 29, 2025, the Company, through its wholly owned indirect subsidiary, WMG BC Holdco LLC, entered into a joint venture agreement (the “JV Agreement”) with BCSS W JV Investments (B), L.P.

(“BainCo”), a Delaware limited partnership and wholly owned indirect subsidiary of Bain Capital Special Situations, LP, pursuant to which the Company and BainCo will operate Beethoven JV 1, LLC, a Delaware limited liability company.

In connection with the JV Agreement, on the same date, Beethoven Financing 1, LLC, a Delaware limited liability company and an indirect subsidiary of the Company, as borrower (the “Initial Borrower”), the additional borrowers from time to time party thereto (together with the Initial Borrower, the “Borrowers”), Beethoven Holdings 1, LLC, a Delaware limited liability company, as guarantor (the “Initial Guarantor”), the additional guarantors from time to time party thereto (together with the Initial Guarantor, the “Guarantors”), each of the commercial paper conduits from time to time party thereto (the “Conduit Lenders”), each of the financial institutions from time to time party thereto as committed lenders (the “Committed Lenders” and, together with the Conduit Lenders, the “Lenders”), the conduit managing agents from time to time party thereto, The Bank of New York Mellon, as administrative agent for the Lenders and as collateral agent for the Secured Parties (in each case, as defined in the Beethoven Credit Agreement), entered into a Credit and Security Agreement (the “Beethoven Credit Agreement”) pursuant to which the Lenders have agreed to extend up to $ 500 million in commitment amounts to the Borrowers (the “Beethoven Credit Facility”).

The obligations of the Borrowers under the Beethoven Credit Agreement will be (a) secured by the Borrowers with a first priority security interest in all of their respective assets and (b) guaranteed by the Guarantors with a first priority security interest in all of their respective assets.

The advances under the Beethoven Credit Agreement shall bear interest at the rates described below under “—Interest Rates.”

The Beethoven Credit Agreement contains customary affirmative and negative covenants for this type of facility, and the ability, subject to the consent of the Lenders, to increase the size of the facility to $ 700 million.

Interest Rates

1 unchanged sentence

provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement.

Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.30 x at March 31, 2025, the applicable margin for SOFR loans and risk-free rate loans would be 1.375 % instead of 1.875 % and the applicable margin for ABR loans would be 0.375 % instead of 0.875 % in the case of 2020 Revolving Loans.

Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.07 x at June 30, 2025, the applicable margin for SOFR loans and risk-free rate loans would be 1.375 % instead of 1.875 % and the applicable margin for ABR loans would be 0.375 % instead of 0.875 % in the case of 2020 Revolving Loans.

If there is a payment default at any time, then the interest rate applicable to overdue principal will be the rate otherwise applicable to such loan plus 2.0 % per annum.

9 unchanged sentences

treasury security having a term closest to seven years plus (B) 5.0 %, plus (C) with respect to class A notes, 3.53 % and, with respect to class B notes, 4.28 %.

The advances under the Beethoven Credit Agreement shall bear interest (a) in the case of a base rate advance, at a rate equal to the base rate, which means, for any day, the highest of (i) the prime rate in effect on such day;

(ii) the federal funds rate in effect on such day plus 0.50 %;

and (iii) Term SOFR for a one-month tenor in effect on such day plus 1.00 % per annum, plus the applicable margin of 1.00 % and (b) in the case of a Term SOFR advance, the Term SOFR for the interest accrual period plus the applicable margin of 2.00 %.

The Company has entered into, and in the future may enter into, interest rate swaps to manage interest rate risk.

As of March 31, 2025, there are no interest rate swaps outstanding.

As of June 30, 2025, there are no interest rate swaps outstanding.

Maturity of Senior Term Loan Facility

3 unchanged sentences

Maturities of Senior Secured Notes

As of March 31, 2025, there are no scheduled maturities of notes until 2028, when $ 352 million is scheduled to mature.

As of June 30, 2025, there are no scheduled maturities of notes until 2028, when $ 381 million is scheduled to mature.

Thereafter, $ 2.708 billion is scheduled to mature.

3 unchanged sentences

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 $ 39 million and $ 42 million for the three months ended March 31, 2025 and 2024, respectively, and $ 76 million and $ 81 million for the six months ended March 31, 2025 and 2024, respectively.

Interest expense, net includes interest expense related to our outstanding indebtedness of $ 44 million and $ 46 million for the three months ended March 31, 2025 and 2024, respectively, and $ 87 million and $ 91 million for the six months ended March 31, 2025 and 2024, respectively.

The weighted-average interest rate of the Company’s total debt was 4.1 % at March 31, 2025, 4.3 % at September 30, 2024, and 4.5 % at March 31, 2024.

Total interest expense, net was $ 43 million and $ 40 million for the three months ended June 30, 2025 and 2024, respectively, and $ 119 million and $ 121 million for the nine months ended June 30, 2025 and 2024, respectively.

Interest expense, net includes interest expense related to our outstanding indebtedness of $ 45 million and $ 46 million for the three months ended June 30, 2025 and 2024, respectively, and $ 132 million and $ 137 million for the nine months ended June 30, 2025 and 2024, respectively.

The weighted-average interest rate of the Company’s total debt was 4.1 % at June 30, 2025, 4.3 % at September 30, 2024, and 4.5 % at June 30, 2024.

Restructuring and Impairments

1 unchanged sentence

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 Company expects to incur total non-recurring restructuring charges of approximately $ 240 million or approximately $ 160 million of total non-recurring after tax charges .

The expected pre-tax charges include approximately $ 158 million of severance and other contract termination costs, along with approximately $ 82 million of non-cash impairment charges.

The majority of severance payments and other termination costs are expected to be paid by the end of fiscal year 2026.

For the three months ended March 31, 2025, total severance and other contract termination costs recorded in connection with the Strategic Restructuring Plan were $ 7 million, all of which was recognized in our Recorded Music segment.

For the six months ended March 31, 2025, total severance and other contract termination costs recorded in connection with the Strategic Restructuring Plan were $ 8 million, of which $ 9 million of expense was recognized in our Recorded Music segment while there was a $ 1 million benefit recognized at Corporate due to a change in estimate.

Additionally, for the three and six months ended March 31, 2025, the Company recognized $ 6 million and $ 32 million of impairment losses, respectively, all of which were recognized in our Recorded Music segment.

The 2024 Strategic Restructuring Plan is substantially complete and the remaining associated cash payments are expected to be made by the end of fiscal year 2026.

For the three months ended June 30, 2025, the Company recognized a $ 1 million benefit in our Recorded Music segment due a change in estimate of severance costs.

For the nine months ended June 30, 2025, total severance and other contract termination costs recorded in connection with the 2024 Strategic Restructuring Plan were $ 7 million, of which $ 8 million of expense was recognized in

our Recorded Music segment while there was a $ 1 million benefit recognized at Corporate due to a change in estimate.

Additionally, for the nine months ended June 30, 2025, the Company recognized $ 32 million of impairment losses, all of which were recognized in our Recorded Music segment.

Impairment charges recognized during the period primarily relate to the write-off of certain long-form audiovisual production assets and lease termination costs for office closures.

The Company continues to review its operations for additional cost

savings and efficiencies.

Our ongoing review could result in additional costs and charges which may be significant.

As of March 31, 2025, total cumulative restructuring and impairment charges recognized in connection with the Strategic Restructuring Plan were $ 218 million with $ 208 million of costs recognized in our Recorded Music segment and $ 10 million recognized at Corporate.

As of June 30, 2025, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $ 217 million with $ 207 million of costs recognized in our Recorded Music segment and $ 10 million recognized at Corporate.

These costs are composed of $ 135 million of severance and other contract termination costs, of which $ 7 million was non-cash, and $ 82 million of non-cash impairment charges.

The below table sets forth the activity for the six months ended March 31, 2025 in the restructuring accrual associated with the Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

The below table sets forth the activity for the nine months ended June 30, 2025 in the restructuring accrual associated with the 2024 Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

Severance Costs Contract Termination Costs Total

4 unchanged sentences

Foreign currency movements — — —

Balance at March 31, 2025 $ 52 $ 8 $ 60

Balance at June 30, 2025 $ 36 $ 7 $ 43

Other Impairments

For the three and nine months ended June 30, 2025, the Company recognized a pre-tax impairment charge of $ 70 million ($ 48 million after-tax) within the Recorded Music segment for long-lived assets associated with certain of the Company’s non-core e-tailer operations due to a triggering event that indicated the carrying amount was no longer recoverable.

The recoverable fair value was determined based on current market indicators.

Commitments and Contingencies

6 unchanged sentences

The Company’s stock-based compensation plans are described in Note 14, “Equity,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

Stock-based compensation consists primarily of common stock, restricted stock units and market-based performance share units granted to eligible employees and executives under the Omnibus Incentive Plan.

For the three and six months ended March 31, 2025, the Company recognized a total of $ 14 million and $ 27 million of non-cash stock-based compensation expense, respectively, which was recorded to additional paid-in capital.

For the three and six months ended March 31, 2024, the Company recognized a total of $ 9 million and $ 18 million of non-cash stock-based compensation expense, respectively, all of which was recorded to additional paid-in capital.

During the six months ended March 31, 2025 and 2024, $ 7 million and $ 15 million of share-based compensation liabilities were reclassified to additional paid-in capital upon a certain number of awards becoming determinable, respectively.

During the six months ended March 31, 2025, in connection with the Senior Management Free Cash Flow Plan (the “Plan”), the Company issued a total of 1,738,018 shares of Class A Common Stock to settle all remaining participants’ deferred equity units previously issued under the Plan.

During the three and six months ended March 31, 2025, the Company satisfied the vesting of RSUs by issuing 730,903 and 794,789 shares of Class A Common Stock under the Omnibus Incentive Plan, respectively, which is net of shares used to settle employee income tax obligations.

Stock-based compensation consists primarily of common stock, restricted stock units, stock options, and market-based performance share units granted to eligible employees and executives under the Omnibus Incentive Plan.

For the three months ended June 30, 2025, the Company recognized a total of $ 16 million of non-cash stock-based compensation expense, of which $ 15 million was recorded to additional paid-in capital and $ 1 million was recorded as a shared-based compensation liability.

For the nine months ended June 30, 2025, the Company recognized a total of $ 43 million of non-cash stock-based compensation expense, of which $ 42 million was recorded to additional paid-in capital and $ 1 million was recorded as a shared-based compensation liability.

For the three and nine months ended June 30, 2024, the Company recognized a total of $ 10 million and $ 28 million of non-cash stock-based compensation expense, respectively, all of which was recorded to additional paid-in capital.

During the nine months ended June 30, 2025 and 2024, $ 7 million and $ 15 million of share-based compensation liabilities were reclassified to additional paid-in capital upon a certain number of awards becoming determinable, respectively.

During the three and nine months ended June 30, 2025, in connection with the Senior Management Free Cash Flow Plan (the “Plan”), the Company issued a total of 869,009 and 2,607,027 shares, respectively, of Class A Common Stock to settle all remaining participants’ deferred equity units previously issued under the Plan.

During the three and nine months ended June 30, 2025, the Company satisfied the vesting of RSUs by issuing 5,959 and 800,748 shares of Class A Common Stock under the Omnibus Incentive Plan, respectively, which is net of shares used to settle employee income tax obligations.

Noncontrolling Interest

On August 5, 2025, the Company acquired the remaining equity interest from noncontrolling interest holders for an aggregate consideration of $ 165 million, which includes cash consideration of $ 40 million and $ 125 million payable in the form of the Company’s Class A Common Stock.

The Company issued 1,416,666 shares of Class A Common Stock on the closing date and expects to issue an additional 2,750,000 shares of Class A Common Stock on the first anniversary of the closing.

These shares are subject to specific lock-up periods.

Share Repurchase Program

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The authorization for the Share Repurchase Program may be suspended, terminated, increased or decreased by the Company’s board of directors at any time.

We did not repurchase any common shares during the three months ended March 31, 2025.

The following table summarizes our total share repurchases and retirement under the Share Repurchase Program during the three and six months ended March 31, 2025:

The following table summarizes our total share repurchases and retirement under the Share Repurchase Program during the three and nine months ended June 30, 2025:

Three Months Ended

March 31, 2025 Six Months Ended

March 31, 2025

June 30, 2025 Nine Months Ended

June 30, 2025

Share Repurchase Type

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20,000 $ 1 80,383 $ 3

For the three and six months ended March 31, 2025, the Company recorded an income tax expense of $ 29 million and $ 118 million, respectively.

The income tax expense for the three and six months ended March 31, 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), and unrecognized tax benefit related to uncertain tax positions.

These charges were partially offset by tax benefits associated with Research and Development (“R&D”) credits, and the net impact of GILTI and foreign derived intangible income (“FDII”).

For the three and six months ended March 31, 2024, the Company recorded an income tax expense of $ 18 million and $ 90 million, respectively.

The income tax expense for the three and six months ended March 31, 2024 is higher than the expected tax benefit at the statutory tax rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S.

For the three and nine months ended June 30, 2025, the Company recorded an income tax expense of $ 5 million and $ 123 million, respectively.

The income tax expense for the three and nine months ended June 30, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, non-deductible executive compensation under Internal Revenue Code (“IRC”) Section 162(m), and the net impact of GILTI and foreign derived intangible income (“FDII”).

These charges were partially offset by a tax benefit recognized on an impairment charge associated with certain of the Company’s non-core e-tailer operations.

The income tax expense for the nine months ended June 30, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S.

state and local taxes, non-deductible executive compensation under IRC Section 162(m), unrecognized tax benefit related to uncertain tax positions, and the net impact of GILTI and FDII.

These charges were partially offset by tax benefits associated with Research and Development (“R&D”) credits, and non-controlling interest.

For the three and nine months ended June 30, 2024, the Company recorded an income tax expense of $ 30 million and $ 120 million, respectively.

The income tax expense for the three and nine months ended June 30, 2024 is lower than the expected tax benefit at the statutory tax rate of 21% primarily due to benefits related to updated allowable costs for reported FDII, non-controlling interest, and the net impact of GILTI and FDII.

These benefits were partially offset by foreign income taxed at rates higher than the United States, withholding taxes, and U.S.

state and local taxes.

The income tax expense for the nine months ended June 30, 2024 is lower than the expected tax expense at the statutory rate of 21% primarily due to the tax benefit from the winding down of the Company’s owned and operated media properties, updated allowable costs for FDII, non-controlling interest, the net impact of GILTI

and FDII and tax benefits associated with R&D credits.

These benefits were partially offset by withholding taxes, foreign income taxed at rates higher than the United States, U.S.

state and local taxes, non-deductible executive compensation under IRC Section 162(m), and unrecognized tax benefit related to uncertain tax positions.

These charges were partially offset by the tax benefit from the winding down of the Company’s owned and operated media properties, nontaxable income from partnerships, the net impact of GILTI and FDII, and tax benefits associated with R&D credits.

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of March 31, 2025 could decrease by up to approximately $ 2 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of June 30, 2025 could decrease by up to approximately $ 2 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.

The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%.

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The Company will continue to monitor legislative developments to determine if there are significant changes to Pillar 2 rules that could lead to a material impact.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which introduces a wide-ranging set of tax reform provisions.

These provisions are scheduled to take affect beginning in our fiscal year 2026.

The Company is currently evaluating the potential impact of this law.

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 March 31, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $ 369 million and the purchase of $ 206 million of foreign currencies at fixed rates that will be settled by September 2025.

As of June 30, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $ 197 million and the purchase of $ 124 million of foreign currencies at fixed rates that will be settled by September 2025.

As of September 30, 2024, the Company had no foreign currency forward exchange contracts outstanding.

The Company recorded realized pre-tax gains of $ 7 million and unrealized pre-tax gains of $ 3 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the six months ended March 31, 2025.

The Company recorded realized pre-tax gains of $ 1 million and recorded no unrealized pre-tax gains or losses related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the six months ended March 31, 2024.

The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at March 31, 2025 and September 30, 2024:

The Company recorded realized pre-tax gains of $ 7 million and unrealized pre-tax losses of $ 5 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the nine months ended June 30, 2025.

The Company recorded realized pre-tax losses of $ 1 million and unrealized pre-tax gains of $ 1 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the nine months ended June 30, 2024.

The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at June 30, 2025 and September 30, 2024:

2025 September 30,

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Three Months Ended (in millions)

March 31, 2025

June 30, 2025

Revenues $ 1,354 $ 336 $ ( 1 ) $ 1,689

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321 96 ( 44 ) 373

March 31, 2024

June 30, 2024

Revenues $ 1,251 $ 305 $ ( 2 ) $ 1,554

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eliminations Total

Six Months Ended (in millions)

March 31, 2025

Nine Months Ended (in millions)

June 30, 2025

Revenues $ 3,874 $ 969 $ ( 4 ) $ 4,839

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914 264 ( 139 ) 1,039

March 31, 2024

June 30, 2024

Revenues 3,885 915 ( 4 ) 4,796

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For the Three Months Ended

March 31, For the Six Months Ended

June 30, For the Nine Months Ended

2025 2024 2025 2024

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Transformation initiative costs 19 18 54 56

Executive transition costs 4 — 4 —

Net gain on divestitures — ( 1 ) — ( 32 )

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Supplemental Cash Flow Disclosures

The Company made interest payments of approximately $ 53 million and $ 57 million during the three months ended March 31, 2025 and 2024, respectively, and approximately $ 71 million and $ 90 million during the six months ended March 31, 2025 and 2024, respectively.

The Company paid approximately $ 58 million and $ 33 million of income and withholding taxes, net of refunds, for the three months ended March 31, 2025 and 2024, respectively, and approximately $ 101 million and $ 72 million of income and withholding taxes, net of refunds, for the six months ended March 31, 2025 and 2024, respectively.

Non-cash investing activities were approximately $ 34 million related to business combinations and the acquisition of music catalogs during the six months ended March 31, 2025, and $ 18 million related to the acquisition of music publishing rights and music catalogs during the six months ended March 31, 2024.

The Company made interest payments of approximately $ 43 million and $ 35 million during the three months ended June 30, 2025 and 2024, respectively, and approximately $ 114 million and $ 125 million during the nine months ended June 30, 2025 and 2024, respectively.

The Company paid approximately $ 50 million and $ 33 million of income and withholding taxes, net of refunds, for the three months ended June 30, 2025 and 2024, respectively, and approximately $ 151 million and $ 105 million of income and withholding taxes, net of refunds, for the nine months ended June 30, 2025 and 2024, respectively.

Non-cash investing activities were approximately $ 32 million related to business combinations and the acquisition of music publishing rights and music catalogs during the nine months ended June 30, 2025, and $ 18 million related to the acquisition of music publishing rights and music catalogs during the nine months ended June 30, 2024.

Net Gain on Divestitures

The Company recognized a pre-tax gain of $ 14 million and $ 31 million during the three and six months ended March 31, 2024, respectively, in connection with the divestiture of certain sound recordings rights in the period which has been reflected as a net gain on divestiture in the accompanying condensed consolidated statement of operations.

The Company recognized a pre-tax gain of $ 1 million during the three months ended June 30, 2024, in connection with the divestiture of non-core owned and operated media properties.

The Company recognized a pre-tax gain of $ 32 million during the nine months ended June 30, 2024 in connection with the divestiture of certain sound recordings rights.

For each period, the divestiture has been reflected as a net gain on divestiture in the accompanying condensed consolidated statement of operations.

Net Gain on Sale of Investments

The Company recognized a pre-tax realized net gain of $ 29 million during the six months ended March 31, 2025 in connection with the sale of an investment which has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.

The Company recognized a pre-tax realized net gain of $ 29 million during the nine months ended June 30, 2025 in connection with the sale of an investment which has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.

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.

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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 February 14, 2025, the Company’s board of directors declared a cash dividend of $ 0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on March 4, 2025.

The Company paid an aggregate of approximately $ 95 million and $ 189 million, or $ 0.18 and $ 0.36 per share, in cash dividends to stockholders and participating security holders for the three and six months ended March 31, 2025.

On May 16, 2025, the Company’s board of directors declared a cash dividend of $ 0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on June 3, 2025.

The Company paid an aggregate of approximately $ 94 million and $ 283 million, or $ 0.18 and $ 0.54 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2025.

On August 7, 2025, the Company’s board of directors declared a cash dividend of $ 0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on September 3, 2025 to stockholders of record as of the close of business on August 20, 2025.

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 March 31, 2025 and September 30, 2024.

Fair Value Measurements as of March 31, 2025

The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of June 30, 2025 and September 30, 2024.

Fair Value Measurements as of June 30, 2025

(Level 1) (Level 2) (Level 3) Total

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The Company has elected to use the measurement alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes.

In the three and six month periods ended March 31, 2025, the Company recorded approximately $ 2 million and $ 3 million of impairment charges on these investments, respectively.

The Company did not record any impairment charges on these investments during the three months ended March 31, 2024 and recorded approximately $ 1 million of impairment charges on these investments during the six months ended March 31, 2024.

In addition, there were no observable price changes events that were completed during the three and six months ended March 31, 2025 and 2024.

In the three and nine month periods ended June 30, 2025, the Company recorded approximately $ 1 million and $ 4 million of impairment charges on these investments, respectively.

The Company did not record any impairment charges on these investments during the three months ended June 30, 2024 and recorded approximately $ 1 million of impairment charges on these investments during the nine months ended June 30, 2024.

In addition, there were no observable price changes events that were completed during the three and nine months ended June 30, 2025 and 2024.

Fair Value of Debt

Based on the level of interest rates prevailing at March 31, 2025, the fair value of the Company’s debt was $ 4.112 billion.

Based on the level of interest rates prevailing at June 30, 2025, the fair value of the Company’s debt was $ 4.217 billion.

Based on the level of interest rates prevailing at September 30, 2024, the fair value of the Company’s debt was $ 3.836 billion.

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both approaches are considered a Level 2 measurement.

Subsequent Events

2025 Restructuring Plan

On July 1, 2025, the Company announced a strategic restructuring plan (the “2025 Restructuring Plan”) designed to free up funds to invest in music and to accelerate the Company’s long-term growth.

The Company expects the 2025 Restructuring Plan to generate pre-tax cost savings of approximately $ 300 million on an annualized run-rate basis by the end of fiscal year 2027 and expects the majority of the cost savings under the 2025 Restructuring Plan to be accretive to Adjusted OIBDA.

There were no charges recognized under the 2025 Restructuring Plan for the three and nine months ended June 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements