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Item 1. Business

2025-11-20 compared with 2024-11-21 · 137 added, 135 removed, 395 unchanged (41% of the section changed)

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Our renowned family of iconic record labels, including Atlantic Records, Warner Records, Elektra Records and Parlophone Records, is home to many of the world’s most popular and influential recording artists.

In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 180,000 songwriters and composers, with a global collection of more than one and a half million musical compositions.

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 two million musical compositions.

Our entrepreneurial spirit and passion for music has driven our recording artist and songwriter focused innovation for decades.

Our Recorded Music business, home to superstar recording artists such as Ed Sheeran, Bruno Mars, Cardi B and Dua Lipa, generated $5.408 billion of revenue in fiscal 2025, representing 81% of total revenues.

Our Music Publishing business, which includes esteemed songwriters such as Twenty One Pilots, Lizzo and Katy Perry, generated $1,210 million of revenue in fiscal 2024, representing 19% of total revenues.

Our Music Publishing business, which includes esteemed songwriters such as Twenty One Pilots, Lizzo and Katy Perry, generated $1.306 billion of revenue in fiscal 2025, representing 19% of total revenues.

We benefit from the scale of our global platform and our local focus.

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Over the last twelve years, Access has consistently backed the Company’s bold expansion strategies through organic A&R as well as acquisitions.

These strategies include investing more heavily in recording artists and songwriters, growing the Company’s global reach, augmenting its streaming expertise, overhauling its systems and technological infrastructure, and diversifying into other music-based revenue streams.

These strategies include investing more heavily in recording artists and songwriters, growing the Company’s global reach, augmenting its streaming expertise, and overhauling its systems and technological infrastructure.

The purchase of Parlophone Label Group (“PLG”) in 2013 strengthened the Company’s presence in core European territories, with recording artists as diverse as Coldplay, David Bowie, David Guetta and Iron Maiden.

That acquisition was followed by other investments that further strengthened the Company’s footprint in established and emerging markets.

Other milestones include the Company’s acquisitions of direct-to-audience businesses such as entertainment specialty e-tailer EMP Merchandising and live music application Songkick.

Industry Overview

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Consumers today engage with music in more ways than ever.

According to the International Federation of the Phonographic Industry (“IFPI”) Engaging with Music 2023 report, global consumers spent 20.7 hours listening to music each week in 2023.

Demographic trends and digital music penetration have been key factors in driving growth in music consumption.

Younger consumers typically are early adopters of new technologies, including music-enabled devices.

According to IFPI’s Engaging with Music 2023 report, in 2023, the rapid emergence of short-form video, livestreaming and in-game experiences drove new opportunities in music.

Of the time people spent using short-form video apps, 82% involved music-dependent videos.

In addition, 36% of the surveyed population had watched a music livestream such as a concert in the last month.

According to IFPI’s Engaging with Music 2023 Report, there is already good awareness of Artificial Intelligence (“AI”) among music fans, with many using it and interested in its capabilities.

In addition, 79% of music fans feel human creativity remains essential to the creation of music and 74% agree that AI should not be used to clone or impersonate artists without authorization.

Additionally, according to IFPI, growth continued in the physical market.

Revenues increased by 13.4% to $5.1 billion, driven by the continued resurgence of interest in vinyl.

Vinyl grew to 17.8% in 2023 driven by its strongest performance in Asia with that region accounting for almost half the global revenues for physical, according to IFPI.

Members of older demographic groups are also increasing their music engagement.

According to an IFPI survey, users of paid accounts as a percentage of all streaming service users rose from 46% to 48% of those surveyed between 2022 and 2023, with growth seen across all demographics.

Music permeates our culture across age groups, as evidenced by the footprint that music has across social media.

According to Statista, as of August 2023, 5 out of the top 10 most followed accounts on X (formerly Twitter) belong to musicians, and according to YouTube, the majority of videos that have achieved more than one billion lifetime views as well as 4 out of the top 10 most watched videos of all time, belong to musicians.

According to Luminate (formerly MRC Data/Billboard), 42% of social media users discover music via social media sites/apps.

Furthermore, Gen Z Music listeners are 71% more likely to discover new music via short video clip sites.

The music industry as a whole is currently undergoing a transformation driven by Gen Z.

According to Luminate, Gen Z is investing more time and money on music when compared to the average music listener.

They spend 25% more hours and spend 9% more money on music annually compared to the average music listener.

According to Luminate’s 2024 Midyear Report, the second quarter of 2024 marked the first time Gen Z ($80 million) surpassed Millennials ($63 million) in reported total monthly live music spend.

One in four Gen Z listeners who are not currently paying for a streaming service intend to begin paying for one in the next 6 months.

Despite global streaming revenue growth slowing down in 2024, there are positive signs of continued growth.

According to Media Insights and Decisions in Action (“MIDiA”), 19% of consumers who have never subscribed to any streaming service would consider doing so in the future.

The largest increase in free streaming subscribers in recent years has been among those aged 45-54 and those over 55.

According to MIDiA, that demographic is most likely to have disposable income, allowing for the strongest conversion rate among the age groups.

In addition, while most audio formats saw fluctuations in growth year after year, streaming music continued to grow and surpassed radio at the beginning of 2025.

Lastly, according to the International Federation of the Phonographic Industry (“IFPI”), vinyl saw its eighteenth consecutive year of growth in 2024, generating over $1.8 billion in global revenue.

From 2020 to 2024, global vinyl revenue grew at a CAGR of 21%.

A notable trend is that four of the top five albums on the IFPI Global Vinyl Album Chart were all released in 2024, which shows an increasing interest in new, frontline records year-over-year.

The music industry is currently focused on developing more effective strategies to monetize super fans.

As defined by Luminate, “super fans” engage with music in five or more ways, such as by attending live performances or subscribing to fan groups.

According to Luminate’s 2024 Year-End Music Report, the rise of super fans in the United States grew from 18% in 2023 to 20% in 2024.

While super fans only comprise one-fifth of the total audience, they are a highly valuable source of revenue for the music industry.

For example, 73% of super fans purchase physical merchandise and super fans spend 105% more than the average music listener.

Recorded Music

The recorded music industry generated $28.6 billion in global revenue in 2023, according to IFPI, which represents a year-over-year increase of 10%, marking the ninth consecutive year of growth.

The recorded music industry generated $29.6 billion in global revenue in 2024, according to IFPI, which represents a year-over-year increase of 4.8%, marking the tenth consecutive year of growth.

According to IFPI, global recorded music revenue has grown at a CAGR of 10.6% since 2020.

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Overall, streaming grew by 7.3% in 2024 as compared to 2023.

Physical represented approximately 17.8% of global recorded music revenue in 2023, with growth in vinyl sales.

Physical represented approximately 16.4% of global recorded music revenue in 2024.

Performance rights revenue represents the use of recorded music by broadcasters and public venues, and represented approximately 9.7% of global recorded music revenue in 2024.

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Synchronization revenue is generated from the use of recorded music in advertising, film, video games and television content, and represented 2.2% of global recorded music revenue in 2024.

From a geographical standpoint, the largest markets for recorded music in 2023 were the United States, Japan, the United Kingdom, Germany, China, France, South Korea, Canada, Brazil and Australia.

The graphic below sets out the top ten markets and their respective revenue growth for 2023.

We believe the following secular trends will continue to drive growth in the recorded music industry:

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According to IFPI, global paid music streaming subscribers totaled 752 million at the end of 2024.

While this represents an increase of 13% from 589 million in 2022, it still represents less than 13% of the 4.6 billion smartphone users globally in 2023.

represents a small fraction of the user base for large, globally scaled digital services such as Facebook, which reported 3.3 billion daily active users as of June 2024, and YouTube, which reported over 2.7 billion monthly users as of October 2024.

Additionally, Instagram reported 2.0 billion monthly users as of October 2024, while TikTok reported 1.5 billion monthly users as of October 2024.

Total (audio and video) streaming reached 666 billion streams in the United States in 2024, up 8% from 2023 according to Luminate.

While this represents an increase of 10.6% from 680 million in 2023, it represents around 9.5% of the population across IFPI reported markets.

It also represents a small fraction of the user base for large, globally scaled digital services such as Facebook, which reported 3.5 billion daily active users as of September 2025, and YouTube, which reported over 2.7 billion monthly active users as of October 2025.

Additionally, Instagram reported 2.0 billion monthly active users as of October 2025, while TikTok reported 1.6 billion monthly

active users as of October 2025.

Total on-demand streaming (audio) reached 697 billion streams in the United States in 2025, up 4.6% from 2024 according to Luminate.

The potential of global paid streaming subscriber growth is demonstrated by the penetration rates in early adopter markets.

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There also remains substantial opportunity in emerging markets, such as Brazil and India, where paid streaming penetration is low compared to developed markets.

According to Goldman Sachs, paid streaming penetration for Brazil and India in 2024 was 14% and 3%, respectively.

According to Goldman Sachs, paid streaming penetration for Brazil and India in 2025 was estimated to be 19% and 3%, respectively.

China, in particular, represents a substantial growth market for the recorded music industry.

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In addition to paid subscriber growth, we believe that, over time, streaming revenues will increase due to pricing increases as the broader market further develops.

For example, in 2024 Spotify increased prices in the United States for the individual, duo, family and student plans.

YouTube increased prices of its individual and family plan tiers on both YouTube Premium and YouTube Music in Europe, the Middle East, Singapore, Thailand, and Indonesia in 2024.

In 2023, Apple Music increased prices of its individual and family plans in the United States, and Amazon Music Unlimited increased the prices of both its individual and family subscription plans.

For example, in 2025, Spotify increased the price of its premium individual tier in multiple markets across South Asia, the Middle East, Africa, Europe, Latin America, and the Asia-Pacific region.

In 2025, YouTube increased the prices of its individual and family plan tiers on both YouTube Premium and YouTube Music in Europe.

In 2024, Amazon Music Unlimited increased the prices of both its individual and family subscription plans in the United States, Canada and the United Kingdom.

We believe the value proposition that streaming provides to consumers supports premium product initiatives.

Additionally, in 2023, Deezer increased prices for all new premium and family subscriptions in key territories including France, UK, Spain, Italy and the Netherlands.

Technology Enables Innovation and Presents Additional Opportunities

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These technologies represent advancements that are deepening listener engagement and driving further growth in music consumption.

Short-form music and music-based video content has grown rapidly, driven by the growth of global social video applications such as TikTok, Instagram Reels and YouTube Shorts which feature short videos often set to music.

Over $1 billion of global revenues last year came from short-form video and social media, which includes TikTok, Instagram Reels, YouTube Shorts, and Snapchat Spotlight.

According to Sensor Tower, Instagram was the most downloaded app globally and TikTok saw the highest consumer spend globally in the first quarter of 2024.

Such applications have the potential for mass adoption, illustrating the opportunity for additional platforms of scale to be created to the benefit of the music entertainment industry.

According to Luminate’s Midyear 2024 report, 76% of music listeners have watched short-form videos in the U.S.,while 22% of music listeners have posted to short-form platforms.

These platforms enable incremental consumption of music appealing to varied, and often younger, audiences.

From a recording artist’s perspective, these platforms have the potential to rewrite the path to stardom.

For example, our recording artist, Fitz & the Tantrums, an American band, rose to international fame in 2018 as their song “HandClap” went viral in Asia on TikTok.

Fitz & the Tantrums quickly topped the international music charts in South Korea and surpassed one billion streams in China.

Short-form music and music-based video content have also become increasingly popular on social media platforms such as Facebook, Instagram and YouTube (through its recent introduction of “Shorts”), further illustrating the growing number of potential pathways through which recording artists may gain consumer exposure and grow connections with their fans.

AI is a transformative technology, introducing both substantial value creation opportunities and material risks for the music industry.

It has the potential to unlock significant value through the licensing of music catalogs to train ethical AI models and by enhancing artist-fan relations.

AI-powered tools are also unlocking new efficiencies across the value chain, such as by generating code, streamlining marketing, and enhancing the precision of A&R discovery.

AI also presents certain risks, including the unauthorized use of copyright-protected catalogs, and the unauthorized use of the images, voices or visual likeness of artists to train AI models.

The use of AI models to produce unauthorized deepfakes of artists may result in works that compete with human-created content, and the proliferation of such AI-generated material could lead to market saturation and a consequent devaluation of human-created music.

Additionally, AI-driven streaming fraud may impact compensation for artists, songwriters and rightsholders.

As a proactive measure, WMG and other major music rightsholders are collaborating with technology platforms, such as Spotify, to establish a responsible, artist-first framework for AI development.

Music Publishing

Music publishing involves the acquisition of rights to, and the licensing of, musical compositions (as opposed to sound recordings) from songwriters, composers or other rights holders.

According to Music & Copyright, the music publishing industry generated $9 billion in global revenue in 2023, representing an approximate 10.9% increase from $8.1 billion in 2022 (following an increase in global music publishing revenues of 17.7% from 2021 to 2022).

Music publishing revenues are classified by Music & Copyright as coming from four main royalty sources:

Music & Copyright classifies music publishing revenues based on four main royalty sources:

digital, mechanical, performance, and synchronization.

In 2023, digital, which accounted for approximately 60% of global revenue, represented the largest component of industry revenues, while performance, which accounted for approximately 17%, represented the second-largest component of industry revenues.

Synchronization accounted for approximately 16% of global revenue in 2023.

Mechanical revenues from traditional physical music formats (e.g., vinyl, CDs, DVDs), accounted for approximately 5% of global revenue in 2023.

According to Music & Copyright, the music publishing industry generated $9.9 billion in global revenue in 2024, representing an approximate 9.2% increase from $9.0 billion in 2023 (following an increase in global music publishing revenues of 10.9% from 2022 to 2023).

Positive Regulatory Trends

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In advance of trial, the National Music Publishers’ Association, the Nashville Songwriters Associations International and the Digital Media Association announced a settlement regarding the U.S.

mechanical streaming rates for 2023-2027.

mechanical streaming rates for 2023 through 2027.

In December 2022, the CRB published final regulations adopting those headline rates, which escalate from 15.1% of total music revenue in 2023 to 15.2% in 2024 and then a half-of-a-tenth-of-a-percentage-point increase in each of the remaining three years, peaking at 15.35% in 2027.

Other significant components of the rate formulae for digital phonorecords, which serve as alternatives to the percent of revenue rates, also increased, including the per-subscriber minimums and the percentage of “Total Content Cost (TCC)” calculations referencing amounts that music service licensees pay to record labels.

Also as part of the Phonorecords IV Proceeding, beginning on January 1, 2023, the mechanical

royalty rates for physical phonorecords and permanent downloads increased to $0.12 per copy or $0.0231 per minute of playing time or fraction thereof, and include inflation-based adjustments for subsequent years of the rate period.

Also as part of the Phonorecords IV Proceeding, beginning on January 1, 2023, the mechanical royalty rates for physical phonorecords and permanent downloads increased to $0.12 per copy or $0.0231 per minute of playing time or fraction thereof, and include inflation-based adjustments for subsequent years of the rate period.

European Union Copyright Directive.

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Our Competitive Strengths

Differentiated Platform of Scale with Top Industry Position.

With over $5.4 billion in annual recorded music revenues, over half of which are generated outside of the United States, we believe our platform is differentiated by the scale, reach and broad appeal of our music.

Our collection of owned and controlled recordings and musical compositions, spanning a large variety of genres and geographies over many decades, cannot be replicated.

Star-Making, Culture-Defining Core Capabilities.

For decades, our A&R strategy of identifying and nurturing recording artists and songwriters with the talents to be successful has yielded an extensive catalog of iconic music across a wide breadth of musical genres and marquee brands all over the world.

Our marketing and promotion departments provide a comprehensive suite of solutions that are specifically tailored to each of our recording artists and carefully coordinated to create the greatest sales momentum for new and catalog releases alike.

The development of our vibrant roster of recording artists has been informed by our significant experience in being able to adapt to changes in consumer trends and sentiment over time.

Our creative instincts yield custom strategies for each and every one of our recording artists.

In addition, Warner Chappell Music boasts a diversified catalog of timeless classics together with an ever-growing group of contemporary songwriters who are actively contributing to today’s top hits.

We believe our longstanding reputation and relationships in the creative community, as well as our historical success in talent development and management, will continue to attract new recording artists and songwriters with staying power and market potential through the strength and scale of our proprietary capabilities.

Strong Financial Profile with Continued Growth, Operating Leverage and Free Cash Flow Generation.

For fiscal year 2023 through fiscal year 2025, we have grown as-reported revenues at a CAGR of 5% driven by secular tailwinds, organic reinvestment in A&R and strategic acquisitions.

For our fiscal year 2025, our business generated net income and Adjusted EBITDA of $370 million and $1.752 billion, respectively, implying an Adjusted EBITDA margin of approximately 26%.

We believe our financial profile provides a strong foundation for our continued growth.

Well-Positioned to Benefit from Growth in the Global Music Market Driven by Streaming.

The music entertainment industry has undergone a transformation in the consumption and monetization of content towards streaming over the last five years.

The music entertainment industry has undergone a transformation in the consumption and monetization of content towards streaming over the last several years.

According to the IFPI, from 2020 through 2024, global recorded music revenue grew at a CAGR of 10.6%, with streaming revenue growing at a CAGR of 13% and increasing as a percentage of global recorded music revenue from 67% to 69% over the same period.

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Established Presence in Growing International Markets, Including China.

We believe we will benefit from the growth in international markets due to our local A&R focus, as well as our local and global marketing and distribution infrastructure that includes a network of subsidiaries, affiliates, and non-affiliated licensees and sub-publishers in more than 70 countries.

We believe we will continue to benefit from the growth in international markets due to our local A&R focus, as well as our local and global marketing and distribution infrastructure that includes a network of subsidiaries, affiliates, and non-affiliated licensees and sub-publishers.

We are developing local talent to achieve regional, national and international success.

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In addition, we have increased organic investment in heavily populated emerging markets by, for example, launching Warner Music Middle East, our recorded music affiliate covering multiple markets across the Middle East and North Africa (“MENA”) with a total population of approximately 502 million people, by acquiring Qanawat, one of the largest independent distributors in MENA, and by investing in Rotana, one of the leading independent labels in MENA.

We have also strengthened our Warner Music Asia executive team with new appointments and promotions.

With every region around the world at different stages in transitioning to digital formats, we believe establishing creative hubs by opening new regional offices and partnering with local players will achieve our objective of building local expertise while delivering maximum global impact for our recording artists and songwriters.

For example, we recently acquired one of South Africa’s leading independent music labels, Coleske, and music from this influential label’s recording artists and songwriters will join our repertoire and receive the support of our wide-ranging global expertise, including distribution and artist services.

Differentiated Platform of Scale with Top Industry Position.

With over $5.2 billion in annual recorded music revenues, over half of which are generated outside of the United States, we believe our platform is differentiated by the scale, reach and broad appeal of our music.

Our collection of owned and controlled recordings and musical compositions, spanning a large variety of genres and geographies over many decades, cannot be replicated.

Star-Making, Culture-Defining Core Capabilities.

The development of our vibrant roster of recording artists has been informed by our significant experience in being able to adapt to changes in consumer trends and sentiment over time.

Our creative instincts yield custom strategies for each and every one of our recording artists.

Strong Financial Profile with Continued Growth, Operating Leverage and Free Cash Flow Generation.

For fiscal year 2022 through fiscal year 2024, we have grown as-reported revenues at a CAGR of 4% driven by secular tailwinds, organic reinvestment in A&R and strategic acquisitions.

For our fiscal year 2024, our business generated net income and Adjusted EBITDA of $478 million and $1,619 million, respectively, implying an Adjusted EBITDA margin of approximately 25%.

We believe our financial profile provides a strong foundation for our continued growth.

For example, in 2021, we acquired one of South Africa’s leading independent music labels, Coleske, and music from this influential label’s recording artists and songwriters will join our repertoire and receive the support of our wide-ranging global expertise, including distribution and artist services.

Experienced Leadership Team and Committed Strategic Investor.

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At the same time, our management team has driven an increase in operating margins and cash flow through an improved revenue mix to higher-margin digital platforms and overhead cost management, while maintaining financial flexibility to both organically invest in the business and pursue strategic acquisitions to diversify our revenue mix.

In 2023, we added key new members to our management team, including our CEO, Robert Kyncl, who joined us from YouTube where he served as Chief Business Officer, and our CFO, Bryan Castellani, who joined us from The Walt Disney Company, most recently serving as CFO for Disney Entertainment & ESPN, who together bring fresh perspectives from their tech and entertainment backgrounds to further enhance and evolve our business strategy.

We’ve added key new members to our management team, including our CEO, Robert Kyncl, who joined us from YouTube where he served as Chief Business Officer, and our CFO, Armin Zerza, who joined us from Activision Blizzard where he served as CFO, who together bring fresh perspectives from their tech and entertainment backgrounds to further enhance and evolve our business strategy.

Our Recorded Music and Music Publishing businesses continue to be led by entrepreneurial and creative individuals with extensive experience in discovering and developing recording artists and songwriters and managing their creative output on a global scale.

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Expertise in Strategic Acquisitions and Investments That Expand Our Business.

Since 2011 when Access became our controlling shareholder, we have completed a number of strategic acquisitions.

The acquisition of PLG in 2013 significantly strengthened our worldwide roster, global footprint and executive talent, particularly in Europe, the acquisition of Spinnin’ Records in 2017 added one of the world’s leading independent electronic music companies, the acquisition of 300 Entertainment in 2022 strengthened and diversified our roster by adding a hip-hop focused label and our joint venture with 10K Projects in 2023 brought a new roster and next generation team into the fold.

Since Access became our controlling shareholder in 2011, we have completed a number of strategic acquisitions.

The acquisition of PLG in 2013 significantly strengthened our worldwide roster, global footprint and executive talent, particularly in Europe;

the acquisition of Spinnin’ Records in 2017 added one of the world’s leading independent electronic music companies;

the acquisition of 300 Entertainment in 2022 strengthened and diversified our roster by adding a hip-hop focused label;

and our joint venture with 10K Projects in 2023 and subsequent acquisition of the remaining interest in 2025 brought a new roster and next generation team into the fold.

Also, in addition to our commercial arrangements with digital music services, we opportunistically invest in some of those services as well as other companies in our industry, including a minority equity stake in Deezer, a French digital music service in which Access owns a controlling equity interest.

In July 2025, we announced a joint venture with Bain Capital (the “Beethoven JV”) that will allow us to leverage third-party capital, capabilities, and resources to expand our buying power and accelerate our M&A initiatives.

Acquiring and investing in businesses that are highly complementary to our existing portfolio further enables us to potentially derive incremental and new revenue streams from different business models in new markets.

Our Growth Strategies

Attract, Develop and Retain Established and Emerging Recording Artists and Songwriters.

A critical component of our global strategy is to produce an increasing flow of new music by finding, developing and retaining recording artists and songwriters who achieve long-term success.

Since 2011, our annual new releases have grown significantly and our catalog of musical compositions has increased to more than one and a half million.

We expect to enhance the value of our assets by continuing to attract and develop new recording artists and songwriters with staying power and market potential.

Our strategy is centered around three key priorities:

growing our market share, growing the value of music, and increasing efficiency.

In an effort to grow our global market share, we attract, develop and retain recording artists and songwriters at all stages of their careers, strategically invest in high-potential markets, expand our global presence with investment in nascent markets, and pursue compelling M&A opportunities.

We also prioritize growing the value of music through collaborative commercial innovation with our digital distribution partners and contractual terms that align with the growth in the music industry.

Finally, we have taken steps to optimize our organization by realigning our structure and leveraging technology to enhance efficiency and global impact.

Attract, Develop and Retain Recording Artists and Songwriters at all Stages of Their Careers.

A critical component of our global strategy is to produce an increasing flow of new music by discovering, developing and retaining recording artists and songwriters who achieve long-term success.

Since 2011, our annual new releases have grown significantly and our catalog of musical compositions has increased to more than two million.

We expect to enhance the value of our repertoire by continuing to attract and develop new recording artists and songwriters with staying power and market potential.

Our A&R teams seek to sign talented recording artists and songwriters who will generate meaningful revenues and increase the enduring value of our catalog.

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In 2018, we acquired Sodatone, an advanced A&R tool that uses streaming, social and touring data to help track early predictors of success.

When combined with the strength of our current ability to identify creative talent, we expect this to further enhance our ability to scout and sign breakthrough recording artists and songwriters.

When combined with the strength of our current ability to identify creative talent, we expect this to elevate our ability to scout and sign breakthrough recording artists and songwriters.

In addition, we anticipate that investment in, or commercial relationships with, technology companies will enable us to tailor our marketing efforts for established recording artists and songwriters by gaining valuable insight into consumer reactions to new releases.

We regularly evaluate our recording artist and songwriter rosters to ensure that we remain focused on developing the most promising and profitable talent and are committed to maintaining financial discipline in the negotiation of our agreements with recording artists and songwriters.

Focus on Growth Markets to Position Us to Realize Upside from Incremental Penetration of Streaming.

While the rapid growth of streaming has already transformed the music entertainment industry, streaming is still in relatively early stages, as significant opportunity remains in both developed markets and markets largely untapped by the adoption of paid streaming subscriptions.

Strategically Invest in Markets with the Most Attractive Opportunities.

While the emergence of streaming has already transformed the music entertainment industry, there are significant opportunities for growth in both developed markets and markets largely untapped by the adoption of paid streaming subscriptions.

Some of our largest markets, such as the United States, Germany, United Kingdom and France, still lag Nordic countries in penetration of paid subscriptions and have room for future growth.

In these markets, we will continue to increase our output of new releases and use data to more effectively target our marketing efforts.

Less mature markets, such as China and Brazil, have large populations with relatively high smartphone penetration, and we are well placed to benefit from streaming tailwinds over the next several years with our local presence and extensive catalog.

Expand Global Presence with Investment in Local Music in Nascent Markets.

We have conducted rigorous analyses across the globe to assess each market’s repertoire value, both in terms of local growth and global exportability.

As a result, we will continue to dedicate meaningful resources to strategically important markets and genres, including leveraging our A&R and marketing expertise and using data to more effectively target our marketing efforts.

Such markets include China and Brazil, that both have large populations with relatively high smartphone penetration, and where we are well placed to benefit from streaming tailwinds over the next several years with our local presence and extensive catalog.

Our portfolio-driven approach and return-focused capital allocation strategy provide us with a proprietary playbook on how to impactfully drive additional revenue, profitability and market share.

Expand Global Presence with Investment in Nascent Markets.

We recognize that music is inherently local in nature, shaped by people and culture.

IFPI considers the global recorded music market in seven distinct regions.

Every region had healthy revenue growth in 2023 and five regions posted double-digit percentage gains.

Sub-Saharan Africa remained the fastest growing area.

One of our vital business functions is to help our recording artists and songwriters solve the complexities associated with a fragmented, global market of mixed musical tastes.

We have found that investment in local music provides the best opportunity to understand these nuances, and we have made it a strategic priority to seek out investment opportunities in emerging markets.

For example, we opened an office in the MENA region to prepare for the forecasted rise in smartphone penetration and projected uptake in digital music.

IFPI reported that three of the seven distinct music regions in the world saw growth in excess of 20% in 2024, with MENA being the fastest growing region.

One of our vital business functions is to help our recording artists and songwriters solve the complexities associated with a fragmented, global market with diverse musical tastes.

We have found that investment in local music provides an opportunity to better understand these nuances, and we have made it a strategic priority to seek out investment opportunities in emerging markets.

These investments are made with the purpose of increasing our understanding of local market dynamics and popularizing our current roster of recording artists and songwriters around the world.

Pursue Acquisitions to Enhance Asset Portfolio and Accelerate Long-Term Growth.

Strengthening and expanding our global footprint through acquisitions enables us to accelerate growth and increase our market share.

We also build upon our core competencies with additive and ancillary capabilities.

We plan to accelerate our acquisition strategy, including through the Beethoven JV, which will allow for the purchase of up to $1.2 billion of catalogs across Recorded Music and Music Publishing.

The Beethoven JV will leverage third-party capital to expand our buying power, accelerating our M&A initiatives, while also providing us with additional rights, revenue, and market share.

We will manage all aspects of marketing, distribution, and administration for the acquired catalogs.

We will continue to pursue acquisitions in a financially disciplined manner, in an effort to drive operating leverage, increased free cash flow and long-term shareholder value.

With respect to our Music Publishing business, we have the opportunity to generate significant value by acquiring other music publishers and extracting cost savings (as acquired catalogs can be administered with little incremental cost), as well as by increasing revenues through more aggressive monetization efforts.

We will also continue to evaluate opportunities to make investments in companies engaged in businesses that we believe will help to advance our strategies.

Embrace Commercial Innovation with New Digital Distributors and Partners.

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We also intend to continue to support and invest in emerging technologies, including artificial intelligence, artificial reality, virtual reality, high-resolution audio and other technologies to continue to build new revenue streams and position ourselves for long-term growth.

Pursue Acquisitions to Enhance Asset Portfolio and Long-Term Growth.

We have successfully completed a number of strategic acquisitions, particularly in our Recorded Music business.

Strengthening and expanding our global footprint provides us with insights on markets in which we can immediately capitalize on favorable industry trends, as evidenced by our acquisition of PLG in 2013.

We also build upon our core competencies with additive and ancillary capabilities.

We plan to continue selectively pursuing acquisition opportunities while maintaining financial discipline to further improve our growth trajectory and drive operating efficiencies with increased free cash flow generation.

We will also continue to evaluate opportunities to add to our catalog or acquire or make investments in companies engaged in businesses that we believe will help to advance our strategies.

Align Contractual Terms with the Music Industry’s Growth.

The music industry is increasingly focused on price increases as a driver of growth to complement the sustained growth in global subscribers that has fueled the industry for over a decade.

We continue to see progress in aligning our contracts with streaming services with this new paradigm, with a focus on economic certainty.

Our collaboration with many of the largest tech companies in the world, including Google, Apple, Amazon, and Spotify, provides more opportunities for innovation, along with greater certainty around our economic participation as product offerings evolve.

Aligned Organizational Structure to Enable Greater Global Impact.

We’ve sharpened our organization to work more efficiently and collaboratively across markets, taking a dynamic approach that prioritizes high impact regions and helps artists reach global audiences faster.

This nimble setup turbocharges opportunities across territories, creating a more connected ecosystem where international artists can build stronger footholds in local markets, and domestic talent has a clearer, faster pathway to global success.

By aligning leadership, strategy, and investment around artist development, A&R, and marketing, we are able to maximize the commercial and cultural potential of our roster.

These changes position our company to discover, develop, and elevate artists in a rapidly evolving music landscape.

Leverage Technology to Drive Greater Efficiency and Targeted Capital Allocation.

We continue to invest in technology to strengthen our competitive edge and improve services for our artists, songwriters, and employees.

This includes upgrading our digital infrastructure and supply chain, as well as implementing tools that help artists and songwriters manage their careers and data more effectively.

For our employees, we’ve introduced new systems to streamline collaboration across markets, increase impact, and drive overall organizational efficiency.

Our ongoing modernization efforts enable us to free up resources to reinvest in music and long-term growth initiatives.

Recorded Music (81%, 81% and 82% of consolidated revenues, before intersegment eliminations, for each of the fiscal years ended September 30, 2025, September 30, 2024 and September 30, 2023, respectively)

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In the United States, our Recorded Music business is conducted principally through our major record labels—Atlantic Records, which includes TenThousand Projects, and Warner Records.

In October 2018, we launched Elektra Music Group in the United States as a standalone label group, which comprises the Elektra, Fueled by Ramen and Roadrunner labels, and in December 2021, we acquired 300 Entertainment and subsequently launched 300 Elektra Entertainment, or 3EE, a frontline label group that brings together the multi-genre power of 300 Entertainment and Elektra Music Group.

Our Recorded Music business also includes Rhino Entertainment, a division that specializes in marketing our recorded music catalog through compilations, reissuances of previously released music and video titles and releasing previously unreleased material from our vault.

We also conduct our Recorded

Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, Warner Classics and Warner Music Nashville.

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, Warner Classics and Warner Records Nashville.

Outside the United States, our Recorded Music business is conducted through various subsidiaries, affiliates and non-affiliated licensees.

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In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels.

Our Recorded Music business’ operations include WMX, a new generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways.

The 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, as well as acting as the Company’s media and creative content arm.

Our business’ distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors;

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, 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.

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We have a decades-long history of identifying and contracting with recording artists who become commercially successful.

Our ability to select recording artists who are likely to be successful is a key element of our Recorded Music business’ strategy and spans all music genres and all major geographies and includes recording artists who achieve national, regional and international success.

Our ability to select recording artists who are likely to be successful is a key element of our Recorded Music business’s strategy and spans all music genres and all major geographies and includes recording artists who achieve national, regional and international success.

We believe that this success is directly attributable to our experienced global team of A&R executives, to the longstanding reputation and relationships that we have developed in the artistic community and to our effective management of this vital business function.

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Our recording artists’ contracts define the commercial relationship between our recording artists and our record labels.

We negotiate recording contracts with recording artists that define our rights to use the recording artists’ music.

In accordance with the terms of the contract, the recording artists receive royalties based on sales and other uses of such recording artists’ music.

We customarily provide upfront payments to recording artists called advances, which are recoupable by us from future royalties otherwise payable to such recording artists.

In accordance with the terms of the contract, recording artists receive royalties based on sales and other uses of their music.

We customarily provide upfront payments to recording artists called advances, which are recoupable by us from future royalties.

We also typically pay costs associated with the recording and production of music, which in many countries are treated as advances recoupable by us from future royalties.

Our typical contract for a new recording artist covers a sufficient number of master recordings to constitute an extended-play record (known as an EP) or an album and provides us with a series of options to acquire subsequent albums from the artist.

Royalty rates and advances are often increased for subsequent albums for which we have exercised our options.

Many of our contracts contain a commitment from the record label to fund video production costs, at least a portion of which in certain countries is treated as advances recoupable by us from future royalties.

Our recording contracts with established artists generally provide for greater advances and higher royalty rates.

Our typical contract for a new recording artist requires the delivery of an extended play record known as an EP or an album and provides us with a series of options to acquire subsequent albums from the recording artist.

Royalty rates and advances are often increased on subsequent albums for which we have exercised our options.

Many of our contracts contain a commitment from us to fund video production costs, at least a portion of which, in certain countries, is treated as advances recoupable by us from future royalties.

Our recording contracts with established artists generally provide for greater advances and higher royalty rates than those with new artists.

Typically, such contracts entitle us to fewer albums and, of those, fewer are optional albums.

In contrast to new artists’ contracts, which, with certain territorial or other exceptions, customarily give us ownership in the artist’s work for the full term of the copyright or a long-term exclusive license, established artists’ contracts more commonly provide us with an exclusive license for some fixed period of time.

It is not unusual for us to renegotiate contract terms with a successful artist during the term of their existing contracts, sometimes in return for an increase in the number of albums that the artist is required to deliver.

Many of the recording contracts we currently enter into are expanded-rights deals, in which we share in the touring, merchandising, sponsorship, fan club or other ancillary music revenues associated with those artists.

In contrast to new artists’ contracts which, with certain territorial or other exceptions, customarily give us ownership in the artist’s work for the full term of the copyright or a long-term exclusive license, established artists’ contracts more commonly provide us with a long-term exclusive license.

It is not unusual for us to renegotiate terms with a successful artist during the term of their existing contracts, sometimes in return for an increase in the number of albums that the artist is required to deliver.

Many of the recording contracts we enter into are expanded-rights deals, in which we share in the touring, merchandising, sponsorship, fan club or other ancillary music revenues associated with those artists.

See “—Intellectual Property—Copyrights.” United States copyright law permits authors or their estates to terminate an assignment or license of copyright (for the United States only) after a set period of time in certain circumstances.

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In connection with the digital distribution of our music, we currently partner with a broad range of digital music services, such as Amazon, Apple, Deezer, KKBox, Spotify, Tencent Music Entertainment Group and YouTube, and are actively seeking to develop and grow our digital business.

We also sell traditional physical formats through both the online distribution arms of traditional retailers such as target.com and walmart.com and traditional online physical retailers such as amazon.com, bestbuy.com and barnesandnoble.com.

We sell music product(s) through traditional physical retail stores such as Target, Walmart, and indie stores.

We also sell to online retailers such as amazon.com, as well as target.com and walmart.com.

Streaming services stream our music on an ad-supported or paid subscription basis.

In addition, downloading services sell downloads of our music on a per-album or per-track basis.

In addition, download services sell downloads of our music on a per-album or per-track basis.

In digital formats, per-unit costs related directly to physical products such as manufacturing, distribution, inventory and return costs do not apply.

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Our agreements with these services establish our fees for the distribution of our music, which vary based on the service.

We typically receive accounting from these services on a monthly basis, detailing the distribution activity, with payments rendered on a monthly basis.

We typically receive accounting from these services on a monthly basis, detailing the distribution activity, with payments generally rendered on a monthly basis.

Our agreements with digital music services generally last one to three years.

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The operations of our Music Publishing business are conducted principally through Warner Chappell Music, our global music publishing company headquartered in Los Angeles, and through various subsidiaries, affiliates, and non-affiliated licensees and sub-publishers.

We own or control rights to more than one and a half million musical compositions, including numerous global pop hits, standards, folk songs and motion picture and theatrical compositions.

We own or control rights to more than two million musical compositions, including numerous global pop hits, 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.

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In the United States, public performance income is administered and collected by music publishers and their performing rights organizations and in most countries outside the United States, collection, administration and allocation of both mechanical and performance income are undertaken and regulated by governmental or quasi-governmental authorities.

Throughout the world, each synchronization license is generally subject to negotiation with a prospective

licensee and, by contract, music publishers pay a contractually required percentage of synchronization income to the songwriters or their heirs and to any co-publishers or other rightsholders.

Throughout the world, each synchronization license is generally subject to negotiation with a prospective licensee and, by contract, music publishers pay a contractually required percentage of synchronization income to the songwriters or their heirs and to any co-publishers or other rightsholders.

Warner Chappell Music acquires copyrights or portions of copyrights and administration rights from songwriters or other third-party holders of rights in musical compositions.

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For 2025, the headline mechanical royalty rate for interactive streaming is 15.25% of revenue, increasing by annual increments to 15.35% in 2027.

“Controlled composition” provisions contained in some recording contracts may apply to the rates mentioned above pursuant to which artist/songwriters license their rights to their record companies for as little as 75% of the statutory rates.

In most other territories, mechanical royalties are based on a percentage of wholesale prices for physical formats and based on a percentage of consumer prices for digital formats.

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Our Recorded Music business includes music from:

• Global superstars such as Ed Sheeran, Dua Lipa, Linkin Park, Coldplay, Twenty One Pilots, Cardi B, Bruno Mars, Michael Bublé, Lizzo, Kelly Clarkson, David Guetta, Kenny Chesney, Madonna, Neil Young, Red Hot Chili Peppers, Prince, Green Day, Cher, Pink Floyd, David Bowie, Fleetwood Mac, Aretha Franklin and The Smiths.

• Next-generation talent including Charli XCX, Benson Boone, Teddy Swims, Zach Bryan, Megan Thee Stallion, Jack Harlow, Lil Uzi Vert, Fred Again.., Artemas, Maria Becerra and CKay.

• International stars such as Burna Boy, Aya Nakamura, King, Robin Schulz, TWICE, Ninho, Capo Plaza, Diljit Dosanjh, Udo Lindenberg and Laura Pausini.

• Global superstars such as Ed Sheeran, Dua Lipa, Charli XCX, Linkin Park, Coldplay, Twenty One Pilots, Cardi B, Bruno Mars, Good Charlotte, Lizzo, David Guetta, Green Day, Cher, Charlie Puth, Michael Bublé, Josh Groban, Tiësto, Kenny Chesney, Madonna, Neil Young, Red Hot Chili Peppers, Prince, Pink Floyd, David Bowie, Fleetwood Mac, Aretha Franklin, and The Smiths.

• Next-generation talent including Alex Warren, ROS É , Benson Boone, Sombr, The Mar í as, Ravyn Lenae, PinkPantheress, Teddy Swims, Zach Bryan, Dasha, Don Toliver, Jack Harlow, Fred Again.., FKA Twigs, and Rachel Chinouriri.

• International stars such as Burna Boy, Aya Nakamura, Yandel, Karan Auijla, King, Robin Schulz, TWICE, Ninho, Capo Plaza, Angelique Kidjo, and Laura Pausini.

Our Music Publishing business includes musical compositions by:

• Superstars such as Anderson Paak, Belly, Bruno Mars, Cardi B, Chris Stapleton, Damon Albarn, Dan + Shay, Dave Mustaine, Deftones, Dua Lipa, Green Day, Imagine Dragons, Kacey Musgraves, Katy Perry, Lil Uzi Vert, Lil Wayne, Lizzo, Madonna, Pablo Alborán, Radiohead, Tayla Parx, Teddy Swims, Tom Petty, Tones and I, and William Corgan.

• International talent such as Aya Nakamura, Angèle, Bausa, Danna Paola, Jack & Coke, Joaquin Sabina, Jonathan Lee, Manuel Medrano, Marco Borreo, Melendi, MZMC, Raye, Shy’m, Stromae, and Tove Lo.

• Songwriting icons like Amy Allen, Brody Brown, busbee, Cole Porter, David Bowie, Eric Clapton, Gamble & Huff, George & Ira Gershwin, George Michael, Grateful Dead, Justin Tranter, Led Zeppelin, Lin Manuel Miranda, Liz Rose, Marco Antonio Solís, Mick Jones, Quincy Jones, Stephen Sondheim and Zach Bryan .

• Superstars such as Anderson Paak, Benson Boone, Bruno Mars, Cardi B, Dan + Shay, Dave Mustaine, Deftones, Dua Lipa, Green Day, Imagine Dragons, Kacey Musgraves, Katy Perry, Laufey, Lil Uzi Vert, Lil Wayne, Lizzo, Madonna, Pablo Alborán, Radiohead, Tayla Parx, Teddy Swims, Tom Petty, Tones and I, William Corgan, and Zach Bryan.

• International talent such as Aya Nakamura, Angèle, Bausa, Danna Paola, Jack & Coke, Joaquin Sabina, Jonathan Lee, Man á, Manuel Medrano, Melendi, MZMC, Raye, Shy’m, Stromae, and Tove Lo.

• Songwriting icons like Amy Allen, Belly, Cole Porter, Chris Stapleton, David Bowie, Eric Clapton, Gamble & Huff, George & Ira Gershwin, George Michael, Grateful Dead, Justin Tranter, Led Zeppelin, Lin Manuel Miranda, Liz Rose, Marco Antonio Solís, Marco Borrero, Mick Jones, Quincy Jones, and Stephen Sondheim.

In our Recorded Music and Music Publishing businesses, we compete based on marketing (including both how we allocate our marketing resources as well as how much we spend on a dollar basis) and on recording artist and songwriter signings.

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The music publishing industry is also highly competitive.

Global music publishing revenue topped the $9 billion milestone for the first time in 2023.

Global music publishing revenue closed in on the $10 billion milestone for the first time in 2024.

The three largest music publishing companies collectively accounted for approximately 60% of the global market in 2024 according to Music & Copyright.

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to sound recordings created prior to February 15, 1972.

The duration of copyright protection for such sound recordings varies based on the year of publication, with all such sound recordings receiving copyright protection for at least 95 years, and sound recordings published between January 1, 1957 and February 15, 1972 receiving copyright protection until February 15, 2067.

The duration of copyright protection for such

sound recordings varies based on the year of publication, with all such sound recordings receiving copyright protection for at least 95 years, and sound recordings published between January 1, 1957 and February 15, 1972 receiving copyright protection until February 15, 2067.

The term of copyright in the EU for musical compositions in all member states lasts for the life of the author plus 70 years.

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Although we cannot assure you that our trademark applications, even for major trademarks, will register, we endeavor to register our major trademarks in every country where we believe the protection of these trademarks is important for our business.

Our major trademarks include 300 Entertainment, ADA, Asylum, Atlantic, East West, Elektra, EMP, Erato, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, Songkick, SPINNIN’ RECORDS and Warner Chappell, and their respective logos.

Our major trademarks include ADA, Asylum, Atlantic, East West, Elektra, Erato, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, SPINNIN’ RECORDS and Warner Chappell, and their respective logos.

We also use certain trademarks pursuant to a royalty-free license agreement.

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We have entered into joint venture arrangements pursuant to which we or our various subsidiary companies distribute, market, promote, license and sell (in most cases, domestically and internationally) recordings and other rights owned by the joint ventures.

An example of this arrangement is Frank Sinatra Enterprises, a joint venture established to administer licenses for use of Frank Sinatra’s name and likeness and manage all aspects of his music, film and stage content.

Examples of this arrangement include Frank Sinatra Enterprises, a joint venture established to administer licenses for use of Frank Sinatra’s name and likeness and manage all aspects of his music, film and stage content and the Beethoven JV, a joint venture launched in July 2025 with Bain Capital to allow for the purchase of up to $1.2 billion of catalogs across both Recorded Music and Music Publishing.

Human Capital

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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-K

Item 1. Business