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Item 7. Management’s Discussion and Analysis

2025-11-20 compared with 2024-11-21 · 233 added, 387 removed, 682 unchanged (48% of the section changed)

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You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report.

Discussion of FY 2023 items and year-over-year comparisons between FY 2024 and FY 2023 can be found in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp.

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• Results of operations.

This section provides an analysis of our results of operations for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022.

This section provides an analysis of our results of operations for the fiscal years ended September 30, 2025 and September 30, 2024.

This analysis is presented on both a consolidated and segment basis.

• Financial condition and liquidity.

This section provides an analysis of our cash flows for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, as well as a discussion of our financial condition and liquidity as of September 30, 2024.

This section provides an analysis of our cash flows for the fiscal years ended September 30, 2025 and September 30, 2024, as well as a discussion of our financial condition and liquidity as of September 30, 2025.

The discussion of our financial condition and liquidity includes recent debt financings and a summary of the key debt covenant compliance measures under our debt agreements.

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Use of Adjusted OIBDA

We evaluate our operating performance based on several factors, including our primary financial measure of operating income (loss) before non-cash depreciation of tangible assets and non-cash amortization of intangible assets adjusted to exclude the impact of non-cash stock-based compensation and other related expenses and certain items that affect comparability including but not limited to gains or losses on divestitures and expenses related to restructuring and transformation initiatives (“Adjusted OIBDA”).

For further details regarding the components of the Company’s Adjusted OIBDA performance measure, see Note 18 to our consolidated financial statements included elsewhere herein.

We evaluate our operating performance based on several factors, including Adjusted OIBDA.

We define Adjusted OIBDA as operating income (loss) adjusted to exclude the following items:

(i) non-cash depreciation of tangible assets, (ii) non-cash amortization of intangible assets, (iii) non-cash stock-based compensation and other related expenses, (iv) gains or losses on divestitures, (v) expenses related to restructuring and transformation initiatives, which includes costs associated with the Company’s financial transformation initiative to design and implement new information technology and upgrade our finance infrastructure, and (vi) executive transition costs.

Items excluded are not viewed to contribute directly to management’s evaluation of operating results.

We consider Adjusted OIBDA to be an important indicator of the operational strengths and performance of our businesses.

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Use of Constant Currency

As exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of revenue and Adjusted OIBDA on a constant-currency basis in addition to reported results helps improve the ability to understand our

operating results and evaluate our performance in comparison to prior periods.

Constant-currency information compares revenue and Adjusted OIBDA between periods as if exchange rates had remained constant period over period.

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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.

We classify our business interests into two fundamental operations:

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

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

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

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

Outside the United States, our Recorded Music business is conducted in more than 70 countries through various subsidiaries, affiliates and non-affiliated licensees.

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

Internationally, we engage in the same activities as in the United States:

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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 next generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways.

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 also work side-by-side with our online and mobile partners to test new concepts.

We believe existing and new digital businesses will be a significant source of growth and will provide new opportunities to successfully monetize our assets

and create new revenue streams.

We believe existing and

new digital businesses will be a significant source of growth and will provide new opportunities to successfully monetize our assets and create new revenue streams.

The proportion of digital revenues attributable to each distribution channel varies by region and proportions may change as the introduction of new technologies continues.

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In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders.

The operations of our Music Publishing business are conducted principally through Warner Chappell Music, our global music publishing company headquartered in Los Angeles, with operations in over 70 countries through various subsidiaries, affiliates, and non-affiliated licensees and sub-publishers.

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

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

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

Assembled over decades, our award-winning catalog includes over 190,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel.

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Recent Events and Factors Affecting Results of Operations and Comparability

Fiscal Year End

Prior to the start of the 2023 fiscal year, the Company maintained a 52-53 week fiscal year ending on the last Friday in each reporting period.

Starting with the 2023 fiscal year, the Company transitioned to a reporting calendar in which the reporting periods end on the last day of the calendar quarter.

Accordingly, the results of operations for the fiscal year ended for September 30, 2024 and September 30, 2023 reflect 366 and 365 days, respectively, compared to 371 days for the fiscal year ended September 30, 2022.

For the fiscal year ended September 30, 2022, the revenue benefit of the additional week was approximately $73 million, primarily reflected in Recorded Music streaming revenue.

2025 Restructuring Plan

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

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

The Plan is expected to be fully implemented by the end of calendar year 2026.

The Company expects to incur total charges of approximately $200 million on a pre-tax basis or approximately $150 million on an after-tax basis.

Approximately $170 million of the charges will be for severance payments and other related termination costs and approximately $30 million of certain other charges.

The Company anticipates that the Plan will result in cash expenditures of approximately $200 million of which $170 million is expected to be paid by the end of fiscal year 2026.

For the fiscal year ended September 30, 2025, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $90 million, of which $74 million of expense was recognized in our Recorded Music segment, $5 million was recorded in our Music Publishing segment, and $11 million was recognized in Corporate.

Additionally, for the fiscal year ended September 30, 2025, the Company recognized $28 million of impairment losses, of which $6 million of expense was recognized in our Recorded Music segment and $22 million was recognized in Corporate.

Impairment charges recognized primarily relate to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets.

2024 Strategic Restructuring Plan

In February 2024, the Company announced a strategic restructuring plan (the “Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade.

Under the Strategic Restructuring Plan, the Company expects a reduction in headcount of approximately 13% of the Company’s overall headcount.

The Company expects to incur total non-recurring restructuring charges of approximately $210 million or approximately $135 million of total non-recurring after tax charges.

The expected pre-tax charges include approximately $148 million of severance and other termination costs and $7 million of other non-cash charges, along with approximately $55 million of non-cash impairment charges primarily in connection with the disposal or winding down of the Company’s non-core owned and operated media properties including the Company’s O&O Media Properties.

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

The cost savings under the Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of the O&O Media Properties, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformative initiative.

In 2024, the Company announced a strategic restructuring plan (the “2024 Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade.

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

The cost savings under the 2024 Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of non-core operations, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformative initiative.

The Company expects allocating a majority of the costs savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities.

For the fiscal year ended September 30, 2024, the Company recognized a total of $178 million of restructuring and impairments in connection with the Strategic Restructuring Plan.

Total severance and other termination costs were $121 million, of which, $113 million was recognized in our Recorded Music segment and $8 million was recognized in Corporate.

Additionally, for the fiscal year ended September 30, 2024, the Company recognized $57 million of non-cash restructuring and impairments which was comprised of $50 million of impairment losses on unamortized intangible assets and $7 million of non-cash restructuring related to future equity awards to be granted, of which, $54 million was recognized in our Recorded Music segment and $3 million was recognized in Corporate.

Impairment charges recognized primarily relate to the winding down of the Company’s O&O Media Properties.

2023 Restructuring Plan

In March 2023, the Company announced a restructuring plan (the “2023 Restructuring Plan”) intended to drive the evolution of the Company and position the Company for long-term growth, primarily through headcount reductions.

The 2023 Restructuring Plan is substantially complete as of September 30, 2024.

There was a $1 million benefit associated with the 2023 Restructuring Plan recorded for the fiscal year ended September 30, 2024 primarily associated with a change in estimate for costs previously recorded.

All restructuring costs were recorded in the Recorded Music segment in the prior year.

For the fiscal year ended September 30, 2025, total severance and other termination costs recorded in connection with the 2024 Strategic Restructuring Plan were $6 million, of which $8 million of expense was recognized in our Recorded Music segment while there was an $2 million benefit recognized in Corporate due to a change in estimate.

Additionally, for the fiscal year ended September 30, 2025, the Company recognized $32 million of impairment losses, all of which were recognized in our Recorded Music

Impairment charges recognized primarily relate to the write-off of certain long-form audiovisual production assets and impairments of operating lease right-of-use assets that are no longer in use.

As of September 30, 2025, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $216 million with $206 million of costs recognized in our Recorded Music segment and $10 million recognized at Corporate.

These costs are composed of $134 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges.

Other Impairments

For the fiscal year ended September 30, 2025, the Company recognized an impairment of $79 million within the Recorded Music segment for long-lived assets associated with EMP Merchandising (“EMP”) which is now classified as held for sale as of September 30, 2025.

BMG Termination

In September 2023, the Company terminated its distribution agreement with BMG as BMG began to bring digital distribution in-house and license directly with digital service partners in fiscal 2024 (the “BMG Termination”).

ADA, which is part of our Recorded Music business, had previously been distributing BMG’s recorded music catalog and revenues are reported within our Recorded Music segment.

The shift to direct deals by BMG will be a phased in-sourcing of distribution, which we expect to be largely completed by the end of fiscal 2025.

During the fiscal year ended September 30, 2024, in connection with the BMG Termination, the Company reported lower Recorded Music digital revenue of $86 million, of which $81 million was streaming revenue.

The impact to Recorded Music’s Adjusted OIBDA was immaterial for the fiscal year ended September 30, 2024.

Executive Transition Costs

During the fiscal year ended September 30, 2023, the Company incurred costs associated with the departure of our Chief Executive Officer which occurred in January 2023 and our Chief Financial Officer which occurred in October 2023 (the “Executive Transition Costs”).

For the fiscal year ended September 30, 2023, the Executive Transition Costs were approximately $7 million, which mainly consisted of severance for our previous CEO and CFO.

Such costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

The departures of our CEO and CFO resulted in the recognition of $13 million of non-cash stock-based compensation expense for the fiscal year ended September 30, 2023, for RSUs and common stock as there is no remaining service required for vesting.

Such costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

The shift to digital direct deals by BMG was a phased in-sourcing of distribution during the current fiscal year and we rolled off BMG, including its physical distribution, at the end of the current fiscal year.

RESULTS OF OPERATIONS

Fiscal Year Ended September 30, 2024 Compared with Fiscal Year Ended September 30, 2023 and Fiscal Year Ended September 30, 2022

Fiscal Year Ended September 30, 2025 Compared with Fiscal Year Ended September 30, 2024

Consolidated Results

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September 30, 2025 vs.

2023 2023 vs.

2024 2023 2022 $ Change % Change $ Change % Change

2025 2024 $ Change % Change

Revenue by Type

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Total revenues increased by $281 million, or 4%, to $6,707 million for the fiscal year ended September 30, 2025 from $6,426 million for the fiscal year ended September 30, 2024.

The current year included $68 million of Recorded Music licensing revenue from a licensing agreement extension for an artist’s catalog (the “Licensing Extension”).

In addition, revenue growth was unfavorably impacted by the BMG Termination which resulted in $86 million of lower Recorded Music digital revenue, partially offset by $16 million incremental Recorded Music streaming revenue resulting from the Digital License Renewal in the fiscal year ended September 30, 2024 compared to the prior year.

Music Publishing digital revenue growth was also impacted by a $24 million benefit in the prior year due to a ruling by the Copyright Royalty Board in Phonorecords III upholding higher percentage of revenue U.S.

mechanical royalty rates (the “CRB Rate Benefit”).

Adjusted for these items, total revenues increased by 7%, which includes a decrease in revenue related to the divestiture of the owned and operated media businesses in connection with the Strategic Restructuring Plan, and includes $4 million of unfavorable currency exchange fluctuations.

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 81% and 19% of total revenues for the fiscal year ended September 30, 2024, respectively, and 82% and 18% of total revenues for the fiscal year ended September 30, 2023, respectively.

Revenue growth was favorably impacted by the settlement of certain infringement cases (the “Copyright Settlement”) which resulted in $16 million higher Recorded Music revenue and $4 million of incremental Recorded Music streaming revenue recognized from a Digital Service Provider (“DSP”) for performance obligations satisfied in previous periods (the “DSP True-Up Payments”).

The prior year included $75 million of Recorded Music licensing revenue from a licensing agreement extension for an artist’s catalog (the “Licensing Extension”), $43 million of incremental Recorded Music streaming revenue recognized from the DSP True-Up Payments, and $30 million of Recorded Music streaming revenue from a deal with one of the Company’s digital partners (the “Digital License Renewal”), which resulted in upfront revenue recognition for the fiscal year ended September 30, 2024.

In addition, revenue growth was unfavorably impacted by the BMG Termination, which resulted in $81 million of lower Recorded Music revenue compared to the prior year, of which $34 million was in streaming revenue and $47 million was in physical revenue.

Adjusted for these items, total revenues increased by 8%, which includes $7 million of favorable currency exchange fluctuations.

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 81% and 19% of total revenues for each of the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

Prior to intersegment eliminations, U.S.

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Total digital revenues after intersegment eliminations increased by $113 million, or 3%, to $4,393 million for the fiscal year ended September 30, 2025 from $4,280 million for the fiscal year ended September 30, 2024.

Excluding the BMG Termination, the Digital License Renewal and the CRB Rate Benefit in the prior year, total digital revenues increased by 10%.

Total streaming revenue increased by 8% driven by growth across Recorded Music and Music Publishing, including growth in both subscription streaming and ad-supported streaming revenue.

Total streaming revenue increased by 2% driven by growth across Recorded Music and Music Publishing, including growth in subscription streaming revenue.

Total digital revenues represented 65% of consolidated revenues for the fiscal year ended September 30, 2025, from 67% for the fiscal year ended September 30, 2024.

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Prior to intersegment eliminations, total digital revenues for the fiscal year ended September 30, 2024 were composed of U.S.

revenues of $1,993 million and international revenues of $1,998 million, or 50% of total digital revenues for both U.S.

and international revenues.

revenues of $2,039 million and international revenues of $2,243 million, or 48% and 52% of total digital revenues, respectively.

Recorded Music revenues increased by $185 million, or 4%, to $5,408 million for the fiscal year ended September 30, 2025 from $5,223 million for the fiscal year ended September 30, 2024.

The increase includes $7 million of unfavorable currency exchange fluctuations.

The increase includes $6 million of favorable currency exchange fluctuations.

Recorded Music revenues were $2,181 million and $2,210 million, or 40% and 42% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

International Recorded Music revenues were $3,227 million and $3,013 million, or 60% and 58% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

The overall increase in Recorded Music revenue was driven by increases in digital, licensing, and physical revenues, partially offset by a decrease in artist services and expanded-rights revenues.

Digital revenue increased by $197 million, or 6%, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in both subscription streaming and ad-supported streaming revenue.

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, and physical revenues, partially offset by a decrease in licensing revenue.

Digital revenue increased by $75 million, or 2%, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription streaming revenue.

Revenue from streaming services increased by $61 million, or 2%, to $3,505 million for the fiscal year ended September 30, 2025 from $3,444 million for the fiscal year ended September 30, 2024.

Adjusted for the impacts of the BMG Termination and the Digital License Renewal, Recorded Music streaming revenue grew by 9%.

The current year included successful releases from Zach Bryan, Benson Boone, Teddy Swims and Dua Lipa.

Download and other digital revenues decreased by $24 million, or 24%, to $75 million for the fiscal year ended September 30, 2024 from $99 million for the fiscal year ended September 30, 2023, which includes the unfavorable impact of the BMG Termination of $5 million compared to the prior year.

Licensing revenue increased by $119 million, or 31%, driven by $68 million from the Licensing Extension and growth across broadcast fees, synchronization and other licensing revenue, and a favorable impact of foreign currency exchange rates of $3 million.

Physical revenue increased by $12 million, or 2%, driven by strength of new releases primarily in Japan, and a favorable impact of foreign currency exchange rates of $1 million.

Artist services and expanded-rights revenue decreased by $60 million primarily due to lower merchandising revenue, a decrease in revenue related to the exit of the Company’s O&O Media Properties announced as part of the Strategic Restructuring Plan, partially offset by higher concert promotion revenue primarily in Japan.

Adjusted for the impact of the DSP True-Up Payments in the current and prior years and the BMG Termination and the Digital License Renewal in the prior year, Recorded Music streaming revenue grew by 5%.

Download and other digital revenues increased by $14 million, or 19%, to $89 million for the fiscal year ended September 30, 2025 from $75 million for the fiscal year ended September 30, 2024, which includes the favorable impact of the Copyright Settlement of $16 million compared to the prior year.

Artist services and expanded-rights revenue increased by $151 million primarily due to higher merchandising revenue of $69 million, which includes a favorable impact from the Company’s partnership with Oasis, the impact of acquisitions of $66 million, and higher concert promotion revenue of $49 million.

Physical revenue increased by $8 million, or 2%, which includes a favorable impact of foreign currency exchange rates of $5 million.

Licensing revenue decreased by $49 million, or 10%, driven by $75 million from the Licensing Extension in the prior year.

Top sellers for the current year included ROSÉ, Bruno Mars, Linkin Park, Teddy Swims, Benson Boone and Charli XCX.

Music Publishing revenues increased by $96 million, or 8%, to $1,306 million for the fiscal year ended September 30, 2025 from $1,210 million for the fiscal year ended September 30, 2024.

Music Publishing revenues were $660 million and $582 million, or 55% and 53% of consolidated Music Publishing revenues, for the fiscal year ended September 30, 2024 and September 30, 2023, respectively.

International Music Publishing revenues were $550 million and $506 million, or 45% and 47% of Music Publishing revenues, for the fiscal year ended September 30, 2024 and September 30, 2023, respectively.

The overall increase in Music Publishing revenue was driven by increases in digital revenue of $94 million, or 14%, performance revenue of $25 million, or 14%, and synchronization revenue of $8 million, or 5%, partially offset by a decrease in mechanical revenue of $5 million, or 8%.

Music Publishing revenues were $693 million and $660 million, or 53% and 55% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

International Music Publishing revenues were $613 million and $550 million, or 47% and 45% of Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

The overall increase in Music Publishing revenue was driven by increases in digital revenue of $37 million, or 5%, performance revenue of $30 million, or 15%, synchronization revenue of $22 million, or 13%, and mechanical revenue of $5 million, or 9%.

The increase in digital revenue is primarily due to continued growth in streaming revenue.

Revenue from streaming services increased by $96 million, or 15%, to $752 million for the fiscal year ended September 30, 2024 from $656 million for the fiscal year ended September 30, 2023, which includes the impact of the CRB Rate Benefit of $24 million in the prior year.

Excluding the impact of the CRB Rate Benefit, Music Publishing revenue from streaming services grew 19%, reflecting the continued market growth and timing of payments, and the favorable impact of foreign currency exchange rates of $3 million.

Performance revenue increased primarily due to an increase in touring activity primarily in Europe and the timing of payments from collection societies in the United States, and synchronization revenue increased driven by higher commercial licensing activity and an increase in copyright infringement settlements primarily in the United States.

The decrease in mechanical revenue was driven by lower physical sales and timing of distributions.

Total revenues increased by $118 million, or 2%, to $6,037 million for the fiscal year ended September 30, 2023 from $5,919 million for the fiscal year ended September 30, 2022.

The prior fiscal year included an additional week, primarily reflected in Recorded Music streaming revenue, and $38 million in Recorded Music and Music Publishing downloads and other digital revenue from the settlement of certain copyright infringement cases (the “Copyright Settlement”).

The increase includes $111 million of unfavorable currency exchange fluctuations.

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 82% and 18% of total revenues for the fiscal year ended September 30, 2023, respectively, and 84% and 16% of total

revenues for the fiscal year ended September 30, 2022, respectively.

Prior to intersegment eliminations, U.S.

and international revenues represented 46% and 54% of total revenues for each of the fiscal years ended September 30, 2023 and September 30, 2022, respectively.

Total digital revenues after intersegment eliminations increased by $123 million, or 3%, to $3,989 million for the fiscal year ended September 30, 2023 from $3,866 million for the fiscal year ended September 30, 2022, which includes $38 million in downloads and other digital revenue from the Copyright Settlement.

Total streaming revenue increased 5% driven by growth across Recorded Music and Music Publishing.

The growth in Music Publishing includes the impact in the year and the prior year of $24 million and $20 million, respectively, due to the CRB Rate Benefit.

Prior to intersegment eliminations, total digital revenues for the fiscal year ended September 30, 2023 were composed of U.S.

revenues of $1,993 million and international revenues of $1,998 million, or 50% of total digital revenues for each of U.S.

and international revenues.

Prior to intersegment eliminations, total digital revenues for the fiscal year ended September 30, 2022 were composed of U.S.

revenues of $1,983 million and international revenues of $1,885 million, or 51% and 49% of total digital revenues, respectively.

Recorded Music revenues decreased by $11 million to $4,955 million for the fiscal year ended September 30, 2023 from $4,966 million for the fiscal year ended September 30, 2022.

The decrease includes $99 million of unfavorable currency exchange fluctuations.

Recorded Music revenues were $2,184 million and $2,231 million, or 44% and 45% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2023 and September 30, 2022, respectively.

International Recorded Music revenues were $2,771 million and $2,735 million, or 56% and 55% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2023 and September 30, 2022, respectively.

The overall decrease in Recorded Music revenue was driven by decreases in physical and artist services and expanded-rights revenues, partially offset by increases in licensing and digital revenues.

Physical revenue decreased by $56 million, or 10%, driven by an unfavorable impact of foreign currency exchange rates of $19 million and a lighter release schedule in the first half of the year.

Artist services and expanded-rights revenue decreased by $23 million due to an unfavorable impact of foreign currency exchange rates of $12 million, lower merchandising revenue, primarily direct-to-consumer merchandising revenue at EMP, and lower advertising revenue, partially offset by higher concert promotion revenue.

Licensing revenue increased by $51 million, which includes growth across broadcast fees, synchronization and other licensing revenue, partially offset by an unfavorable impact of foreign currency exchange rates of $8 million.

Digital revenue increased by $17 million, or 1%, which includes an unfavorable impact of foreign currency exchange rates of $60 million and $31 million in downloads and other digital revenue from the Copyright Settlement in the prior year.

Revenue from streaming services grew by $64 million, or 2%, to $3,223 million for the fiscal year ended September 30, 2023 from $3,159 million for the fiscal year ended September 30, 2022 and was impacted by unfavorable foreign currency exchange rates of $57 million, or 2%.

Streaming revenue reflects a lighter release schedule and the market-related slowdown in ad-supported revenue in the first half of the year, as well as the impact of an additional week in the prior year.

Adjusted for the impact of an additional week in the prior year, Recorded Music streaming revenue increased by 4%.

The fiscal year ended September 30, 2023 included successful releases from Ed Sheeran, Zach Bryan, Dua Lipa and Bailey Zimmerman.

Downloads and other digital revenue decreased by $47 million, or 32%, to $99 million for the fiscal year ended September 30, 2023 from $146 million for the fiscal year ended September 30, 2022 due to the Copyright Settlement in the prior year and continued shift to streaming services.

Music Publishing revenues increased by $130 million, or 14%, to $1,088 million for the fiscal year ended September 30, 2023 from $958 million for the fiscal year ended September 30, 2022.

Music Publishing revenues were $582 million and $513 million, or 53% and 54% of consolidated Music Publishing revenues, for the fiscal year ended September 30, 2023 and September 30, 2022, respectively.

International Music Publishing revenues were $506 million and $445 million, or 47% and 46% of Music Publishing revenues, for the fiscal year ended September 30, 2023 and September 30, 2022, respectively.

The overall increase in Music Publishing revenue was driven by increases in digital revenue of $106 million, or 19%, performance revenue of $14 million and mechanical revenue of $13 million, partially offset by a decrease in synchronization revenue of $5 million.

The increase in digital revenue is primarily due to increases in streaming revenue driven by the continued growth in streaming services, the impact of digital deal renewals, which includes the Company’s TikTok renewal, a revenue true-up of $9 million and a $4 million year-over-year increase in the impact of the CRB Rate Benefit, partially offset by $7 million in downloads and other digital revenue from the Copyright Settlement in the prior year and an unfavorable impact of foreign currency exchanges rates of $5 million.

Revenue from streaming services grew by $117 million, or 22%, to $656 million for the fiscal year ended September 30, 2023 from $539 million for the fiscal year ended September 30, 2022.

Performance revenue increased primarily due to continued recovery from COVID disruption in the first half of the year, partially offset by an unfavorable impact of foreign currency exchange rates of $3 million.

Mechanical revenue increased from a higher share of physical sales and timing of distributions, partially offset by an unfavorable impact of foreign currency exchange rates of $2 million.

The decrease in synchronization revenue is attributable to lower commercial licensing activity and an unfavorable impact of foreign currency exchange rates of $2 million, partially offset by copyright infringement settlements.

Revenue from streaming services increased by $39 million, or 5%, to $791 million for the fiscal year ended September 30, 2025 from $752 million for the fiscal year ended September 30, 2024.

Performance revenue increased due to growth from concerts, radio, live and non-live events, and the timing of payments from collection societies in the United States.

Synchronization revenue increased driven by the timing of other copyright infringement settlements primarily in the United States and the $8 million impact of our acquisition of Tempo Music.

Mechanical revenue increased, driven by the timing of distributions.

Revenue by Geographical Location

revenue increased by $104 million, or 4%, to $2,870 million for the fiscal year ended September 30, 2024 from $2,766 million for the fiscal year ended September 30, 2023.

Recorded Music revenue increased by $26 million, or 1%, primarily driven by growth in licensing revenue of $92 million due to $68 million from the Licensing Extension.

Recorded Music growth was also attributable to higher physical revenue, partially offset by lower U.S.

Recorded Music digital and artist services and expanded-rights revenues.

U.S Recorded Music physical revenue increased by $1 million compared to the prior year.

Recorded Music digital revenue decreased by $17 million, or 1%, which includes a decrease in U.S.

Recorded Music streaming revenue of $4 million, and a decrease in download and other digital revenue of $13 million.

The decrease in U.S.

Recorded Music digital revenue is primarily due to the impact of the BMG Termination of $48 million.

Recorded Music artist services and expanded-rights revenue decreased by $50 million due to lower merchandising revenue of $15 million and a decrease in revenue related to the exit of the Company’s O&O Media Properties announced as part of the Strategic Restructuring Plan.

revenue remained constant for the fiscal year ended September 30, 2025 compared to the fiscal year ended September 30, 2024.

Recorded Music revenue decreased by $29 million, or 1%, primarily driven by a decrease in licensing revenue of $70 million largely attributable to $75 million from the Licensing Extension in the prior year, partially offset by higher U.S.

Recorded Music artist services and expanded-rights revenue driven by the impact of our acquisitions of $38 million.

Recorded Music digital revenue remained constant for the fiscal year ended September 30, 2025 compared to the prior year driven by an increase in download and other digital revenue of $15 million, offset by a decrease in U.S.

Recorded Music streaming revenue of $12 million.

The increase in download and other digital revenue is largely due to the impact of the Copyright Settlement of $16 million in the current year.

The decrease in streaming revenue is primarily due to the impact of the DSP True-Up Payments of $23 million and the BMG Termination of $23 million in the prior year.

Adjusted for the impact of these events, streaming revenue increased due to continued growth in subscription services.

Music Publishing revenue increased by $33 million, or 5%, to $693 million for the fiscal year ended September 30, 2025 from $660 million for the fiscal year ended September 30, 2024.

Music Publishing digital revenue increased by $63 million, or 16%, attributable to continued growth in streaming revenue.

Music Publishing streaming revenue increased by $62 million, or 16%, reflecting continued market growth and timing of payments, partially offset by the CRB Rate Benefit of $24 million in the prior year.

Music Publishing synchronization revenue increased by $3 million, primarily driven by an increase in copyright infringement settlements, higher commercial and video game licensing activity, partially offset by lower film and television licensing activity.

Music Publishing performance revenue increased by $11 million, or 18% due to timing of payments from collection societies.

Music Publishing mechanical revenue remained flat to prior year.

Music Publishing digital revenue increased by $6 million, or 1%, attributable to continued growth in streaming revenue, which increased by $6 million, or 1%.

Music Publishing synchronization revenue increased by $21 million, primarily driven by an increase in other copyright infringement settlements and the acquisition of Tempo Music of $8 million.

Music Publishing performance revenue increased by $6 million, or 8% due to the timing of payments.

Music Publishing mechanical revenue increased by $2 million, or 17% driven by the timing of distributions.

International revenue increased by $277 million, or 8%, to $3,840 million for the fiscal year ended September 30, 2025 from $3,563 million for the fiscal year ended September 30, 2024.

Excluding the unfavorable impact of foreign currency exchange rates of $5 million, international revenue increased by $291 million, or 9%.

International Recorded Music revenue increased by $242 million, or 9%, primarily due to increases in digital revenue of $214 million, licensing revenue of $27 million, and physical revenue of $11 million, partially offset by lower artist services and expanded-rights revenue of $10 million.

International Recorded Music digital revenue increased largely due to an increase in streaming revenue of $225 million, or 13%.

Streaming revenue growth includes the impact of the Digital Licensing Renewal of $16 million, partially offset by the impact of the BMG Termination of $38 million and an unfavorable impact of foreign currency exchange rates of $14 million.

Excluding the favorable impact of foreign currency exchange rates of $5 million, international revenue increased by $272 million, or 8%.

International Recorded Music revenue increased by $214 million, or 7%, primarily due to increases in digital revenue of $72 million, artist services and expanded-rights revenue of $112 million, licensing revenue of $21 million, and physical revenue of $9 million.

International Recorded Music digital revenue increased largely due to an increase in streaming revenue of $73 million, or 4%, which includes the impact of the DSP True-Up Payments of $4 million in the current year, as well as the Digital Licensing Renewal of $30 million, the DSP True-Up Payments of $20 million and the BMG Termination of $11 million in the prior year.

Adjusted for the impact of these events, streaming revenue increased due to continued growth in streaming services.

Download and other digital revenues decreased by $1 million due to the continued shift to streaming services.

International Recorded Music licensing revenue increased by $27 million, which includes the impact of copyright infringement settlements, growth in broadcast fees and other licensing revenue, and the favorable impact of foreign currency exchange rates of $3 million.

International Recorded Music physical revenue increased by $11 million, driven by strength of new releases primarily in Japan, and a favorable impact of foreign currency exchange rates of $1 million.

International Recorded Music artist services and expanded-rights revenue decreased by $10 million primarily due to lower direct-to-consumer merchandising revenue, partially offset by higher concert promotion revenue primarily in Japan and France, and a favorable impact of foreign currency exchange rates of $3 million.

International Music Publishing revenue increased by $44 million, or 9%, to $550 million for the fiscal year ended September 30, 2024, from $506 million for the fiscal year ended September 30, 2023.

This was primarily driven by increases in digital revenue of $31 million, performance revenue of $14 million, and synchronization revenue of $5 million, partially offset by lower mechanical revenue of $5 million and other publishing revenue of $1 million.

International Music Publishing streaming revenue increased by $34 million, or 13%, which includes a favorable impact of foreign currency exchange rates of $3 million, partially offset by a revenue true up of $9 million in the prior year.

Performance revenue increased by $14 million or 13% due to strong artist touring activity primarily in Europe and Latin America.

International Music Publishing synchronization revenue increased by $5 million due to higher commercial licensing activity primarily in Brazil, France and Germany.

International Music Publishing mechanical revenue decreased by $5 million largely due to lower physical sales and timing of distributions.

revenue increased by $22 million, or 1%, to $2,766 million for the fiscal year ended September 30, 2023 from $2,744 million for the fiscal year ended September 30, 2022.

Recorded Music revenue decreased by $47 million, or 2%.

The primary driver was the decrease of U.S.

Recorded Music digital revenue of $58 million, or 4%, which includes the Copyright Settlement and the impact of an additional week in the prior year.

Recorded Music streaming revenue decreased by $19 million, or 1%, as a result of a lighter release schedule and the market-related slowdown in ad-supported revenue, as well as the impact of an additional week in the prior year.

Download and other digital revenue decreased by $39 million due to the Copyright Settlement in the prior year and continued shift to streaming services.

Decreases are also attributable to lower U.S.

Recorded Music physical revenue of $5 million due to a lighter release schedule.

Recorded Music artist services and expanded-rights revenue decreased by $2 million, primarily driven by lower advertising revenue, partially offset by higher merchandising and other artist services and expanded-rights revenue.

The increase in licensing revenue of $18 million is due to growth in synchronization and other licensing revenue.

Music Publishing revenue increased by $69 million, or 13%, to $582 million for the fiscal year ended September 30, 2023 from $513 million for the fiscal year ended September 30, 2022.

This was primarily driven by the increase in U.S.

Music Publishing of $68 million in digital revenue due to the continued growth in streaming services, the impact of digital deal renewals, which includes the Company’s TikTok renewal, and a $4 million year-over-year increase in the impact of the CRB Rate Benefit, partially offset by $7 million of the Copyright Settlement in the prior year.

Music Publishing streaming revenue increased by $75 million, or 23%.

Performance and mechanical revenue both increased by $2 million.

The decrease in synchronization revenue of $4 million is due to lower commercial licensing activity, partially offset by copyright infringement settlements.

International revenue increased by $97 million, or 3%, to $3,277 million for the fiscal year ended September 30, 2023 from $3,180 million for the fiscal year ended September 30, 2022.

Excluding the unfavorable impact of foreign currency exchange rates, international revenue increased by $208 million, or 7%.

International Recorded Music revenue increased by $36 million, or 1%, primarily due to increases in digital revenue of $75 million and licensing revenue of $33 million, partially offset by decreases in physical revenue of $51 million and artist services and expanded-rights revenue of $21 million.

International Recorded Music digital revenue increased due to an $83 million, or 5%, increase in streaming revenue which includes the unfavorable impact of foreign currency exchange rates of $57 million.

Download and other digital revenues decreased by $8 million.

International Recorded Music licensing revenue increased by $33 million including growth in broadcast fees and other licensing revenue, partially offset by the unfavorable impact of foreign currency exchange rates of $8 million.

International Recorded Music physical revenue decreased by $51 million, driven by an unfavorable impact of foreign currency exchange rates of $19 million and a lighter release schedule.

International Recorded Music artist services and expanded-rights revenue decreased by $21 million due to the unfavorable impact of foreign currency exchange rates of $12 million and lower direct-to-consumer merchandising activity at EMP, partially offset by higher concert promotion revenue.

International Recorded Music artist services and expanded-rights revenue increased by $112 million primarily due to higher concert promotion revenue of $49 million and higher merchandising revenue of $39 million, which includes a favorable impact from the Company’s partnership with Oasis, and a favorable impact of foreign currency exchange rates of $4 million.

International Recorded Music licensing revenue increased by $21 million, driven by higher licensing activity primarily in Europe and Japan and the favorable impact of foreign currency exchange rates of $3 million.

International Recorded Music physical revenue increased by $9 million, driven by strength of new releases primarily in Asia, and a favorable impact of foreign currency exchange rates of $5 million.

International Music Publishing revenue increased by $63 million, or 11%, to $613 million for the fiscal year ended September 30, 2025, from $550 million for the fiscal year ended September 30, 2024.

This was primarily driven by the increase in digital revenue of $38 million, performance revenue of $12 million and mechanical revenue of $11 million.

International Music Publishing streaming revenue increased by $42 million, or 19%, which includes a revenue true-up of $9 million, partially offset by an unfavorable impact of foreign currency exchange rates of $4 million.

Performance revenue increased driven by continued recovery from COVID disruption in the first half of the year.

Higher mechanical revenue is primarily driven by a higher share of physical sales and timing of distributions.

Synchronization revenue decreased by $1 million primarily due to an unfavorable impact of foreign currency exchange rates.

This was primarily driven by increases in digital revenue of $31 million, performance revenue of $24 million, synchronization revenue of $1 million, mechanical revenue of $3 million and other publishing revenue of $4 million.

International Music Publishing streaming revenue increased by $33 million, or 11%, reflecting continued market growth.

Performance revenue increased by $24 million or 19% driven by higher touring revenue primarily in Europe and Latin America.

Cost of revenues

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Artist and repertoire costs $ 2,342 $ 2,167 $ 175 8 %

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Our cost of revenues increased by $277 million, or 8%, to $3,632 million for the fiscal year ended September 30, 2025 from $3,355 million for the fiscal year ended September 30, 2024.

Expressed as a percentage of revenues, cost of revenues decreased to 52% for the fiscal year ended September 30, 2024 from 53% for the fiscal year ended September 30, 2023.

Artist and repertoire costs increased by $169 million, to $2,167 million for the fiscal year ended September 30, 2024 from $1,998 million for the fiscal year ended September 30, 2023.

Artist and repertoire costs as a percentage of revenue increased to 34% for the fiscal year ended September 30, 2024, from 33% for the fiscal year ended September 30, 2023, primarily due to revenue mix,

timing of artist and repertoire investments, partially offset by the impact of the Licensing Extension which had minimal associated cost of revenues.

Product costs increased by $9 million, to $1,188 million for the fiscal year ended September 30, 2024 from $1,179 million for the fiscal year ended September 30, 2023.

Product costs as a percentage of revenue decreased to 18% for the fiscal year ended September 30, 2024 from 20% for the fiscal year ended September 30, 2023 due to revenue mix from lower artist services and expanded-rights revenue, partially offset by higher costs on third-party distributed label revenue.

Our cost of revenues increased by $97 million, or 3%, to $3,177 million for the fiscal year ended September 30, 2023 from $3,080 million for the fiscal year ended September 30, 2022.

Expressed as a percentage of revenues, cost of revenues increased to 54% for the fiscal year ended September 30, 2025 from 52% for the fiscal year ended September 30, 2024.

Artist and repertoire costs increased by $175 million, to $2,342 million for the fiscal year ended September 30, 2025 from $2,167 million for the fiscal year ended September 30, 2024.

Artist and repertoire costs as a percentage of revenue remained constant at 33% for each of the fiscal years ended September 30, 2023 and September 30, 2022, primarily due to the favorable impact of foreign currency exchange rates, offset by revenue mix.

Artist and repertoire costs as a percentage of revenue increased to 35% for the fiscal year ended September 30, 2025, from 34% for the fiscal year ended September 30, 2024, primarily due to revenue mix.

Product costs increased by $102 million, to $1,290 million for the fiscal year ended September 30, 2025 from $1,188 million for the fiscal year ended September 30, 2024.

Product costs as a percentage of revenue increased to 20% for the fiscal year ended September 30, 2023 from 19% for the fiscal year ended September 30, 2022 due to revenue mix from higher third-party distributed label revenue.

Product costs as a percentage of revenue increased to 19% for the fiscal year ended September 30, 2025 from 18% for the fiscal year ended September 30, 2024 due to revenue mix from higher artist services and expanded-rights and merchandise revenue and the impact of the Licensing Extension, partially offset by the impact of the BMG Termination.

Selling, general and administrative expenses

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General and administrative expense (1) $ 1,135 $ 1,089 $ 46 4 %

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______________________________________

(1) Includes depreciation expense of $103 million, $87 million and $76 million for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, respectively.

(1) Includes depreciation expense of $118 million and $103 million for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

Total selling, general and administrative expense increased by $10 million, or 1%, to $1,889 million for the fiscal year ended September 30, 2025 from $1,879 million for the fiscal year ended September 30, 2024.

1 unchanged sentence

General and administrative expense increased by $46 million to $1,135 million for the fiscal year ended September 30, 2025 from $1,089 million for the fiscal year ended September 30, 2024.

The increase in general and administrative expense was driven by higher expenses related to transformation initiatives of $23 million, higher depreciation expense related to IT assets being placed in service of $16 million, higher non-cash stock-based compensation expense of $9 million, the impact of acquisitions of approximately $7 million, and unfavorable movements in foreign currency exchange rates of $1 million.

These expenses are partially offset by savings from the Company’s restructuring plans, the majority of which has been reinvested into the business, including incremental investment in technology of $28 million, and lower Executive Transition Costs of $7 million related to severance for our previous CEO and CFO in the prior year.

Expressed as a percentage of revenue, general and administrative expense increased to 17% for the fiscal year ended September 30, 2024, from 16% for the fiscal year ended September 30, 2023.

Selling and marketing expense decreased by $25 million, or 4%, to $685 million for the fiscal year ended September 30, 2024 from $710 million for the fiscal year ended September 30, 2023.

Expressed as a percentage of revenue, selling and marketing expense decreased to 11% for the fiscal year ended September 30, 2024 from 12% for the fiscal year ended September 30, 2023 due to lower variable marketing spend and an increase in savings from the Company’s restructuring plans.

Distribution expense decreased by $20 million, to $105 million for the fiscal year ended September 30, 2024 from $125 million for the fiscal year ended September 30, 2023 driven by revenue mix.

Expressed as a percentage of revenue, distribution expense remained constant at 2% for each of the fiscal years ended September 30, 2024 and September 30, 2023.

Total selling, general and administrative expense decreased by $36 million, or 2%, to $1,826 million for the fiscal year ended September 30, 2023 from $1,862 million for the fiscal year ended September 30, 2022.

Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 30% for the fiscal year ended September 30, 2023 from 31% for the fiscal year ended September 30, 2022.

General and administrative expense increased by $52 million to $991 million for the fiscal year ended September 30, 2023 from $939 million for the fiscal year ended September 30, 2022.

The increase in general and administrative expense was mainly due to higher employee related costs, net of savings from the Restructuring Plan, which includes incremental non-cash stock-based compensation and other related expenses of $10 million, the Executive Transition Costs of $7 million, incremental investment in technology of $17 million, the $10 million impact of the mark-to-market adjustment of an earn-out liability in the prior year related to an acquisition, higher depreciation of $11 million, and expenses related to transformation initiatives of $7 million, partially offset by lower acquisition transaction costs, lower severance costs, the impact of an additional week in the prior year and favorable movements in foreign currency exchange rates of $14 million.

The increase in general and administrative expense was driven by incremental investment in technology of $21 million, higher depreciation expense of $15 million related to technology assets being placed into service, including the core financials component of our new technology platform, the impact of acquisitions of approximately $9 million, and higher executive transition costs of $8 million in the current year, partially offset by savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business.

Expressed as a percentage of revenue, general and administrative expense remained constant at 17% for each of the fiscal years ended September 30, 2025 and September 30, 2024.

Selling and marketing expense decreased by $43 million, or 6%, to $642 million for the fiscal year ended September 30, 2025 from $685 million for the fiscal year ended September 30, 2024.

Expressed as a percentage of revenue, selling and marketing expense decreased to 12% for the fiscal year ended September 30, 2023 from 13% for the fiscal year ended September 30, 2022 due to lower variable marketing spend and savings from the Restructuring Plan.

Distribution expense was $125 million for the fiscal year ended September 30, 2023 and $131 million for the fiscal year ended September 30, 2022.

Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the fiscal year ended September 30, 2025 from 11% for the fiscal year ended September 30, 2024 due to lower variable marketing spend and savings from the Company’s restructuring plans.

Distribution expense increased by $7 million, to $112 million for the fiscal year ended September 30, 2025 from $105 million for the fiscal year ended September 30, 2024 driven by revenue mix due to higher artist services and expanded-rights and concert promotion revenue.

Expressed as a percentage of revenue, distribution expense remained constant at 2% for each of the fiscal years ended September 30, 2025 and September 30, 2024.

Restructuring and Impairments

For the fiscal year ended September 30, 2024, total restructuring and impairment costs were $177 million consisting of approximately $128 million of restructuring charges and approximately $50 million of non-cash impairment losses related to the Strategic Restructuring Plan.

Restructuring costs in the prior year are attributed to the 2023 Restructuring Plan.

For the fiscal year ended September 30, 2023, total restructuring costs were $40 million consisting of severance costs for the 2023 Restructuring Plan.

For the fiscal year ended September 30, 2025, total restructuring and impairment costs were $234 million consisting of approximately $95 million of restructuring charges and approximately $139 million of non-cash impairment losses.

Impairment charges include a $79 million impairment charge on long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025 and $60 million of charges recognized in connection with the Company’s restructuring plans primarily related to the write-off of certain long-form audiovisual production assets, impairments of operating lease right-of-use assets that are no longer in use and write-offs of artist advances.

Net gain on divestitures

During the fiscal year ended September 30, 2024, the Company recorded a pre-tax gain of $32 million in connection with the divestiture of certain sound recording and publishing rights and the divestitures of certain non-core O&O Media Properties.

During the fiscal year ended September 30, 2023, the Company sold its interest in certain sound recording rights and recorded a pre-tax gain of $41 million, which was recorded as a net gain on divestiture in the accompanying consolidated statement of operations.

There was no net gain or loss on divestiture recorded during the fiscal year ended September 30, 2022.

There was no net gain on divestitures during the fiscal year ended September 30, 2025.

During the fiscal year ended September 30, 2024, the Company recorded a pre-tax gain of $32 million in connection with the divestiture of certain sound recording and publishing rights.

Reconciliation of Net Income Attributable to Warner Music Group Corp.

and Operating Income to Consolidated Adjusted OIBDA

As previously described, we use Adjusted OIBDA as our primary measure of financial performance.

As previously described, we use Adjusted OIBDA as one of our measures to evaluate our operating performance.

The following table reconciles operating income to Adjusted OIBDA, and further provides the components from net income attributable to Warner Music Group Corp.

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Net income attributable to Warner Music Group Corp.

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Interest expense, net 162 161 1 1 %

Loss on extinguishment of debt — 4 — (4) -100 % 4 — %

Operating income 694 823 (129) -16 %

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Adjusted OIBDA

Adjusted OIBDA increased by $197 million to $1,432 million for the fiscal year ended September 30, 2024, from $1,235 million for the fiscal year ended September 30, 2023 as a result of strong operating performance, the favorable impacts of the

Licensing Extension of $67 million and the Digital License Renewal of $6 million year-over-year, savings from the Company’s restructuring plans, the majority of which was reinvested in the Company’s business, and the impact of the CRB Rate Benefit of $6 million in the prior year.

Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 22% for the fiscal year ended September 30, 2024 from 20% for the fiscal year ended September 30, 2023, due to strong operating performance, the Licensing Extension, the Digital License Renewal, and savings from the Company’s restructuring plans, the majority of which was reinvested in the Company’s business.

Adjusted OIBDA increased by $86 million to $1,235 million for the fiscal year ended September 30, 2023, from $1,149 million for the fiscal year ended September 30, 2022 as a result of strong operating performance, partially offset by the benefit of the Copyright Settlement and the extra week in the fiscal year ended September 30, 2022.

Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 20% for the fiscal year ended September 30, 2023 from 19% for the fiscal year ended September 30, 2022 due to strong operating performance.

Adjusted OIBDA increased by $11 million to $1,443 million for the fiscal year ended September 30, 2025, from $1,432 million for the fiscal year ended September 30, 2024, largely attributable to the impact of the Copyright Settlement of $9 million and the DSP True-Up Payments of $3 million in the current year, offset by the Licensing Extension of $74 million, the DSP True-Up Payments of $23 million, the Digital License Renewal of $12 million and the BMG Termination of $2 million in the prior year, as well as savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, and favorable movements in currency exchange rates.

Expressed as a percentage of total revenue, Adjusted OIBDA margin remained constant at 22% for each of the fiscal years ended September 30, 2025 and September 30, 2024.

Non-cash stock-based compensation and other related costs

Our non-cash stock-based compensation and other related costs increased by $9 million to $61 million for the fiscal year ended September 30, 2024 from $52 million for the fiscal year ended September 30, 2023, primarily related to issuance of additional restricted stock units and market-based performance stock units, in addition to the acceleration of expense related to awards associated with certain employees that were terminated under the Strategic Restructuring Plan.

Our non-cash stock-based compensation and other related costs increased by $10 million to $52 million for the fiscal year ended September 30, 2023 from $42 million for the fiscal year ended September 30, 2022, primarily related to the separation agreement with our previous Chief Executive Officer during the fiscal year ended September 30, 2023.

Our non-cash stock-based compensation and other related costs remained constant at $61 million for each of the fiscal years ended September 30, 2025 and September 30, 2024, primarily related to the issuance of restricted stock units and market-based performance stock units and the acceleration of expense related to awards associated with certain employees that were terminated under our restructuring plans.

Additionally, the current year includes $5 million of non-cash stock-based compensation expense related to the departure of our former CFO.

Net gain on divestitures

Net gain on divestitures during the fiscal year ended September 30, 2024 includes a pre-tax gain of $32 million in connection with the divestitures of certain sound recording and publishing rights, including a divestiture of certain non-core O&O Media Properties in connection with the Strategic Restructuring Plan.

This compares to a pre-tax gain of $41 million during the fiscal year ended September 30, 2023.

During the fiscal year ended September 30, 2023, the Company sold its interest in certain sound recording rights and recorded a pre-tax gain of $41 million.

There was no net gain or loss on divestiture recorded during the fiscal year ended September 30, 2022.

There was no net gain on divestitures during the fiscal year ended September 30, 2025.

During the fiscal year ended September 30, 2024, the Company recognized a pre-tax gain of $32 million in connection with the divestitures of certain sound recording and publishing rights.

Executive transition costs

There were no executive transition costs recorded during the fiscal year ended September 30, 2024.

During the fiscal year ended September 30, 2023, the Company incurred Executive Transition Costs of $7 million, which mainly consisted of severance for our previous CEO and CFO.

There were no executive transition costs recorded during the fiscal year ended September 30, 2022.

Executive transition costs were $8 million during the fiscal year ended September 30, 2025, which consisted of severance costs associated with the departure of our former CFO and other certain executives in the current year.

Transformation initiative costs

Our transformation initiative costs increased by $23 million to $76 million for the fiscal year ended September 30, 2024 from $53 million for the fiscal year ended September 30, 2023 due to an increase in costs associated with our finance transformation.

Our transformation initiative costs increased by $7 million to $53 million for the fiscal year ended September 30, 2023 from $46 million for the fiscal year ended September 30, 2022 due to an increase in costs associated with our finance transformation.

Our transformation initiative costs decreased by $6 million to $70 million for the fiscal year ended September 30, 2025 from $76 million for the fiscal year ended September 30, 2024 due to a decrease in costs associated with our finance transformation as assets are placed into service.

Restructuring and Impairments

Our restructuring and impairment charges increased to $177 million for the fiscal year ended September 30, 2024, from $42 million for the fiscal year ended September 30, 2023.

The increase is primarily driven by costs recorded in connection with the Strategic Restructuring Plan which include non-cash impairment charges of approximately $50 million and restructuring costs of approximately $128 million.

Restructuring costs in the prior year are attributed to the 2023 Restructuring Plan.

Our restructuring and impairment charges increased to $42 million for the fiscal year ended September 30, 2023 primarily related to the 2023 Restructuring Plan.

This compares to restructuring costs of $8 million for the fiscal year ended September 30, 2022.

Our restructuring and impairment charges increased $57 million to $234 million for the fiscal year ended September 30, 2025, from $177 million for the fiscal year ended September 30, 2024.

The increase is primarily driven by an increase in non-cash impairment charges of $89 million driven by an impairment charge of $79 million on long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025 and higher impairments recognized in connection with the Company’s restructuring plans.

This is partially offset by lower restructuring costs of $32 million attributable to the Company’s restructuring plans.

Depreciation expense

Our depreciation expense increased by $15 million to $118 million for the fiscal year ended September 30, 2025 from $103 million for the fiscal year ended September 30, 2024.

This increase is primarily due to an increase in IT assets being placed into service.

Our depreciation expense increased by $11 million to $87 million for the fiscal year ended September 30, 2023 from $76 million for the fiscal year ended September 30, 2022.

This increase is primarily due to an increase in technology capital spend and assets being placed into service.

This increase is primarily due to an increase in technology assets being placed into service, including the core financials component of our new technology platform.

Amortization expense

Our amortization expense decreased by $21 million, or 9%, to $224 million for the fiscal year ended September 30, 2024 from $245 million for the fiscal year ended September 30, 2023.

The decrease is primarily due to certain intangible assets becoming fully amortized, partially offset by incremental amortization related to acquisitions of music-related assets.

Our amortization expense decreased by $18 million, or 7%, to $245 million for the fiscal year ended September 30, 2023 from $263 million for the fiscal year ended September 30, 2022.

The decrease is primarily due to certain intangible assets becoming fully amortized.

Our amortization expense increased by $34 million, or 15%, to $258 million for the fiscal year ended September 30, 2025 from $224 million for the fiscal year ended September 30, 2024.

The increase is driven by incremental amortization related to acquisitions of music-related assets.

Operating income

Our operating income increased by $33 million to $823 million for the fiscal year ended September 30, 2024 from $790 million for the fiscal year ended September 30, 2023.

The increase in operating income was due to the factors that led to the increase in Adjusted OIBDA noted above, as well as lower amortization expense, partially offset by higher restructuring and non-cash impairment charges, higher depreciation expense and a decrease in net gain on divestitures as noted above.

Our operating income increased by $76 million to $790 million for the fiscal year ended September 30, 2023 from $714 million for the fiscal year ended September 30, 2022.

The increase in operating income was due to the factors that led to the increase in Adjusted OIBDA noted above, and lower amortization, partially offset by higher depreciation expense as noted above.

Loss on extinguishment of debt

There was no loss on extinguishment of debt for the fiscal year ended September 30, 2024.

For the fiscal year ended September 30, 2023, we recorded a loss on extinguishment of debt in the amount of $4 million related to the repayment of Senior Term Loan Facility Tranche H loans.

We recorded a loss on extinguishment of debt in the amount of $4 million for the fiscal year ended September 30, 2023, which represents the remaining unamortized discount and deferred financing costs in connection with the redemption of Senior Term Loan Facility Tranche H loans.

There was no loss on extinguishment of debt for the fiscal year ended September 30, 2022.

Our operating income decreased by $129 million to $694 million for the fiscal year ended September 30, 2025 from $823 million for the fiscal year ended September 30, 2024.

The decrease in operating income was due to revenue mix, higher restructuring and non-cash impairment charges, higher depreciation and amortization expense and a decrease in net gain on divestitures, partially offset by factors that led to the increase in Adjusted OIBDA noted above.

Interest expense, net

Our interest expense, net, increased to $161 million for the fiscal year ended September 30, 2024 from $141 million for the fiscal year ended September 30, 2023 due to the maturity of the interest rate swaps and higher interest rates on variable rate debt, partially offset by increased interest income.

Our interest expense, net, increased to $141 million for the fiscal year ended September 30, 2023 from $125 million for the fiscal year ended September 30, 2022 due to higher principal balance related to the issuance of incremental Senior Term Loan Facility and higher interest rates, partially offset by interest income.

Our interest expense, net, increased by $1 million to $162 million for the fiscal year ended September 30, 2025 from $161 million for the fiscal year ended September 30, 2024 due to incremental debt related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo Music, partially offset by lower interest rates on variable rate debt.

Other expense (income)

Other expense for the fiscal year ended September 30, 2025 primarily includes foreign currency losses on our Euro-denominated debt of $43 million, and currency exchange losses on our intercompany loans of $32 million, partially offset by income earned on equity method investments of $8 million.

Other expense for the fiscal year ended September 30, 2023 primarily includes foreign currency losses on our Euro-denominated debt of $61 million, partially offset by currency exchange gains on the Company’s intercompany loans of $24 million.

Other income for the fiscal year ended September 30, 2022 primarily includes foreign currency gains on our Euro-denominated debt of $151 million, currency exchange gains on our intercompany loans of $34 million and unrealized gains on hedging activity of $10 million, partially offset by aggregate realized and unrealized losses of $49 million related to equity investments.

Other expense for the fiscal year ended September 30, 2024 primarily includes foreign currency losses on our Euro-denominated debt of $47 million, and currency exchange losses on our intercompany loans of $26 million, partially offset by income earned on equity method investments of $8 million.

Income tax expense

Our income tax expense decreased by $3 million to $120 million for the fiscal year ended September 30, 2025 from $123 million for the fiscal year ended September 30, 2024.

The decrease of $47 million in income tax expense is primarily due to the impact from winding down of the Company’s O&O Media Properties, return to provision adjustments, and nontaxable income from partnerships.

Our income tax expense decreased by $15 million to $170 million for the fiscal year ended September 30, 2023 from $185 million for the fiscal year ended September 30, 2022.

The decrease of $15 million in income tax expense is primarily due to the impact of lower pre-tax income in the fiscal year ended September 30, 2023 and benefit of R&D credits.

These benefits were partially offset by an increase in unrecognized tax benefit related to uncertain tax positions, higher withholding taxes and higher portion of the pre-tax income being earned outside of the United States in the fiscal year ended September 30, 2023.

Net income decreased by $39 million to $478 million for the fiscal year ended September 30, 2024 from $439 million for the fiscal year ended September 30, 2023 as a result of the factors described above.

The decrease of $3 million in income tax expense is primarily due to the decrease in pre-tax income and benefit from the change in indefinite reinvestment assertion related to EMP, partially offset by benefits in the prior year from the winding down of the Company’s owned and operated media properties, updated allowable costs for reported foreign derived intangible income, and nontaxable income from partnerships.

Net income decreased by $108 million to $370 million for the fiscal year ended September 30, 2025 from $478 million for the fiscal year ended September 30, 2024 as a result of the factors described above.

Noncontrolling interest

There was $43 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2024, an increase of $34 million, from $9 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2023, driven by higher income from non-wholly-owned subsidiaries in the current year, primarily due to the impact of the Licensing Extension.

There was $9 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2023, an increase from $4 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2022, driven by higher income from non-wholly-owned subsidiaries in the fiscal year ended September 30, 2023.

There was $5 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2025, a decrease of $38 million, from $43 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2024, primarily driven by the impact of the Licensing Extension in the prior year, partially offset by higher income from non-wholly-owned subsidiaries in the current year.

Business Segment Results

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September 30, 2025 vs.

2023 2023 vs.

2024 2023 2022 $ Change % Change $ Change % Change

2025 2024 $ Change % Change

Recorded Music

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The overall increase in Recorded Music revenue was driven by increases in digital, licensing and physical revenues, partially offset by lower artist services and expanded-rights revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.

Recorded Music revenue decreased by $11 million to $4,955 million for the fiscal year ended September 30, 2023 from $4,966 million for the fiscal year ended September 30, 2022.

International Recorded Music revenues were $2,771 million and $2,735 million, or 56% and 55% of consolidated Recorded Music revenues, for the fiscal year ended September 30, 2023 and September 30, 2022, respectively.

The overall decrease in Recorded Music revenue was driven by decreases in physical and artist services and expanded-rights revenues, partially offset by growth in licensing and digital revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights and physical revenues, partially offset by lower licensing revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.

Cost of revenues

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2023 2023 vs.

2024 2023 2022 $ Change % Change $ Change % Change

2025 2024 $ Change % Change

Artist and repertoire costs $ 1,528 $ 1,411 $ 117 8 %

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Recorded Music cost of revenues increased by $219 million, or 8%, to $2,818 million for the fiscal year ended September 30, 2025 from $2,599 million for the fiscal year ended September 30, 2024.

Expressed as a percentage of Recorded Music revenue, cost of revenues remained constant at 50% for each of the fiscal years ended September 30, 2024 and September 30, 2023.

Artist and repertoire costs as a percentage of revenue remained constant at 27% for each of the fiscal years ended September 30, 2024 and September 30, 2023.

Product costs as a percentage of revenue decreased to 23% for the fiscal year ended September 30, 2024 from 24% for the fiscal year ended September 30, 2023.

The overall decrease as a percentage of revenue is primarily due to the impact of the Licensing Extension and revenue mix from lower artist services and expanded-rights revenue, partially offset by higher costs on third-party distributed label revenue.

Recorded Music cost of revenues increased by $37 million, or 2%, to $2,502 million for the fiscal year ended September 30, 2023 from $2,465 million for the fiscal year ended September 30, 2022.

Expressed as a percentage of Recorded Music revenue, cost of revenues remained constant at 50% for each of the fiscal years ended September 30, 2023 and September 30, 2022.

Artist and repertoire costs as a percentage of revenue remained constant at 27% for each of the fiscal years ended September 30, 2023 and September 30, 2022, primarily due to the favorable impact of foreign currency exchange rates, offset by revenue mix.

Expressed as a percentage of Recorded Music revenue, cost of revenues increased to 52% for the fiscal year ended September 30, 2025 from 50% for the fiscal year ended September 30, 2024.

Artist and repertoire costs as a percentage of revenue increased to 28% for the fiscal year ended September 30, 2025 from 27% for the fiscal year ended September 30, 2024 primarily driven by revenue mix.

Product costs as a percentage of revenue increased to 24% for the fiscal year ended September 30, 2025 from 23% for the fiscal year ended September 30, 2024.

The overall increase as a percentage of revenue primarily relates to revenue mix due to higher third-party distributed label revenue.

Selling, general and administrative expense

The overall increase as a percentage of revenue is primarily due to revenue and deal mix from higher artist services and expanded-rights revenue.

Selling, general and administrative expenses

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

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2023 2023 vs.

2024 2023 2022 $ Change % Change $ Change % Change

2025 2024 $ Change % Change

General and administrative expense (1) $ 679 $ 664 $ 15 2 %

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Distribution expense 112 105 7 7 %

Total selling, general and administrative expense

Total selling, general and administrative expenses

$ 1,406 $ 1,432 $ (26) -2 %

______________________________________

(1) Includes depreciation expense of $52 million, $50 million and $51 million for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, respectively.

Recorded Music selling, general and administrative expense increased by $8 million, or 1%, to $1,432 million for the fiscal year ended September 30, 2024 from $1,424 million for the fiscal year ended September 30, 2023.

General and administrative expenses increased by $60 million, primarily due to higher non-cash stock-based compensation and other related expenses of $23 million, the impact of acquisitions of approximately $7 million, unfavorable movements in foreign currency exchange rates of $3 million, partially offset by incremental savings from the Company’s restructuring plans, the majority of which has been reinvested into the Company’s business, including incremental investment in technology of $18 million.

The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the Company’s restructuring plans.

The decrease in distribution expense was primarily due to revenue mix and lower merchandising revenue.

Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 27% for the fiscal year ended September 30, 2024 from 29% for the fiscal year ended September 30, 2023.

(1) Includes depreciation expense of $53 million and $52 million for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

Recorded Music selling, general and administrative expense decreased by $26 million, or 2%, to $1,406 million for the fiscal year ended September 30, 2025 from $1,432 million for the fiscal year ended September 30, 2024.

The decrease in general and administrative expense was primarily due to the favorable movements in foreign currency exchange rates of $18 million, legal expenses for the Copyright Settlement in the prior year and lower severance costs, acquisition transaction costs and employee related costs, including savings from the Restructuring Plan, partially offset by the $10 million impact of the mark-to-market adjustment of an earn-out liability in the prior year related to an acquisition.

The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the Restructuring Plan.

The decrease in distribution expense was primarily due to lower physical and artist services and expanded-rights revenue.

General and administrative expenses increased by $15 million, primarily due to the impact of acquisitions of approximately $8 million, partially offset by lower non-cash stock-based compensation and other related expenses of $10 million and savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business.

The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the Company’s restructuring plans.

The decrease in distribution expense was primarily due to revenue mix.

Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 26% for the fiscal year ended September 30, 2025 from 27% for the fiscal year ended September 30, 2024.

Operating income and Adjusted OIBDA

Recorded Music operating income increased by $41 million to $916 million for the fiscal year ended September 30, 2024 from $875 million for the fiscal year ended September 30, 2023 due to the factors that led to the increase in Recorded Music Adjusted OIBDA noted below, as well as lower amortization expense of $28 million, partially offset by a $24 million year-over-year decrease in net gain on divestitures, $166 million of restructuring and non-cash impairment charges primarily related to the Strategic Restructuring Plan compared to $40 million of restructuring charges in the prior year related to the 2023 Restructuring Plan, and higher non-cash stock-based compensation expense and other related costs of $23 million.

Recorded Music Adjusted OIBDA increased by $188 million, to $1,282 million for the fiscal year ended September 30, 2024 from $1,094 million for the fiscal year ended September 30, 2023.

The increase in Adjusted OIBDA is primarily driven by strong operating performance, $67 million year-over-year increase from the Licensing Extension, $6 million year-over-year increase from the Digital License Renewal, and savings from the Company’s restructuring plans, the majority of which has been reinvested in the Company’s business.

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 25% for the fiscal year ended September 30, 2024 from 22% for the fiscal year ended September 30, 2023, which includes the impact from the Licensing Extension and Digital License Renewal.

Recorded Music operating income increased by $79 million to $875 million for the fiscal year ended September 30, 2023 from $796 million for the fiscal year ended September 30, 2022 driven by the factors affecting Adjusted OIBDA discussed below, as well as lower selling, general and administrative expense, the net gain on sale of the Company’s interest in certain sound recording rights and a decrease in amortization due to certain intangible assets becoming fully amortized, partially offset by lower revenues, higher cost of revenues and costs related to the 2023 Restructuring Plan of $40 million.

Recorded Music Adjusted OIBDA increased by $48 million, to $1,094 million for the fiscal year ended September 30, 2023 from $1,046 million for the fiscal year ended September 30, 2022 due to strong operating performance, the favorable impact of foreign exchange rates, savings from the 2023 Restructuring Plan, partially offset by revenue mix and the impact of an additional week during the fiscal year ended September 30, 2022.

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 22% for the fiscal year ended September 30, 2023 from 21% for the fiscal year ended September 30, 2022 due to the factors that led to the increase in Adjusted OIBDA noted above.

Recorded Music operating income decreased by $66 million to $850 million for the fiscal year ended September 30, 2025 from $916 million for the fiscal year ended September 30, 2024 due to the factors that led to the decrease in Recorded Music Adjusted OIBDA noted below, as well as higher restructuring and non-cash impairment charges in the current year of $32 million, which is driven by $79 million of impairment charges recognized for long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025, partially offset by lower restructuring and impairment charges in connection with the Company’s restructuring plans, higher non-cash stock-based compensation expense and other related costs of $10 million and higher amortization expense of $9 million, partially offset by a $17 million year-over-year decrease in net gain on divestitures.

Recorded Music Adjusted OIBDA decreased by $13 million, to $1,269 million for the fiscal year ended September 30, 2025 from $1,282 million for the fiscal year ended September 30, 2024.

The decrease in Adjusted OIBDA is largely attributable to the

Copyright Settlement of $9 million and DSP True-Up Payments of $3 million in the current year, partially offset by the Licensing Extension of $74 million, DSP True-Up Payments of $23 million, the Digital License Renewal of $12 million, and the $2 million impact of the BMG Termination in the prior year, as well as savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, and the impact of favorable movements in foreign currency exchange rates.

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin decreased to 23% for the fiscal year ended September 30, 2025 from 25% for the fiscal year ended September 30, 2024, due to the factors noted above.

Music Publishing

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International Music Publishing revenues were $613 million and $550 million, or 47% and 45% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

The overall increase in Music Publishing revenue was driven by growth in digital, performance and synchronization revenue, partially offset by lower mechanical revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.

Music Publishing revenues increased by $130 million, or 14%, to $1,088 million for the fiscal year ended September 30, 2023 from $958 million for the fiscal year ended September 30, 2022.

Music Publishing revenues were $582 million and $513 million, or 53% and 54% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2023 and September 30, 2022, respectively.

International Music Publishing revenues were $506 million and $445 million, or 47% and 46% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2023 and September 30, 2022, respectively.

The overall increase in Music Publishing revenue was driven by growth in digital, performance and mechanical revenue, partially offset by lower synchronization revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.

The overall increase in Music Publishing revenue was driven by growth in digital, performance, synchronization and mechanical revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.

Cost of revenues

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2023 2023 vs.

2024 2023 2022 $ Change % Change $ Change % Change

2025 2024 $ Change % Change

Artist and repertoire costs $ 821 $ 763 $ 58 8 %

2 unchanged sentences

Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the fiscal years ended September 30, 2025 and September 30, 2024.

Music Publishing cost of revenues increased by $61 million, or 10%, to $681 million for the fiscal year ended September 30, 2023 from $620 million for the fiscal year ended September 30, 2022.

Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues decreased to 63% for the fiscal year ended September 30, 2023 from 65% for the fiscal year ended September 30, 2022, primarily attributable to the favorable impact of foreign currency exchange rates, partially offset by revenue mix.

Selling, general and administrative expense

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2023 2023 vs.

2024 2023 2022 $ Change % Change $ Change % Change

2025 2024 $ Change % Change

General and administrative expense (1) $ 131 $ 123 $ 8 7 %

3 unchanged sentences

______________________________________

(1) Includes depreciation expense of $4 million, $3 million and $5 million for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, respectively.

Music Publishing selling, general and administrative expense increased to $125 million for the fiscal year ended September 30, 2024 from $117 million for the fiscal year ended September 30, 2023.

The increase was primarily due to higher compensation and employee-related costs, partially offset by a decrease in selling and marketing expense due to lower variable marketing spend.

Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense decreased to 10% for the fiscal year ended September 30, 2024 from 11% for the fiscal year ended September 30, 2023.

Music Publishing selling, general and administrative expense increased to $117 million for the fiscal year ended September 30, 2023 from $112 million for the fiscal year ended September 30, 2022.

The increase in general and administrative expense was primarily due to higher employee-related costs.

Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense decreased to 11% for the fiscal year ended September 30, 2023 from 12% for the fiscal year ended September 30, 2022.

(1) Includes depreciation expense of $5 million and $4 million for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.

Music Publishing selling, general and administrative expense increased by $9 million to $134 million for the fiscal year ended September 30, 2025 from $125 million for the fiscal year ended September 30, 2024.

The increase was primarily due to higher compensation and employee-related costs and an increase in selling and marketing expense from higher variable marketing spend.

Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for each of the fiscal years ended September 30, 2025 and September 30, 2024.

Operating income and Adjusted OIBDA

Music Publishing operating income increased by $38 million to $238 million for the fiscal year ended September 30, 2024 from $200 million for the fiscal year ended September 30, 2023, driven by the same factors affecting Adjusted OIBDA discussed below as well as a $14 million net gain on a divestiture recognized for the fiscal year ended September 30, 2024, partially offset by an increase in amortization expense of $8 million, and higher non-cash stock-based compensation and other related costs of $1 million.

Music Publishing operating income decreased by $14 million to $224 million for the fiscal year ended September 30, 2025 from $238 million for the fiscal year ended September 30, 2024 largely due to the factors affecting Adjusted OIBDA discussed below, partially offset by higher amortization expense of $24 million and a $14 million net gain on a divestiture recognized in the prior year.

Music Publishing Adjusted OIBDA increased by $31 million, or 9%, to $361 million for the fiscal year ended September 30, 2025 from $330 million for the fiscal year ended September 30, 2024.

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 27% for each of the fiscal years ended September 30, 2024 and September 30, 2023, driven by strong operating performance, partially offset by the CRB Rate Benefit in the prior year of $6 million.

Music Publishing operating income increased by $61 million to $200 million for the fiscal year ended September 30, 2023 from $139 million for the fiscal year ended September 30, 2022 as a result of higher revenues, partially offset by higher cost of revenues and selling, general and administrative expense.

Music Publishing Adjusted OIBDA increased by $63 million, or 27%, to $296 million for the fiscal year ended September 30, 2023 from $233 million for the fiscal year ended September 30, 2022 largely due to the factors that led to the increase in Music Publishing operating income noted above.

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 27% for the fiscal year ended September 30, 2023 from 24% for the fiscal year ended September 30, 2022 due to strong operating performance and the favorable impact of foreign currency exchange rates, partially offset by revenue mix.

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 28% for the fiscal year ended September 30, 2025 from 27% in the fiscal year ended September 30, 2024, primarily driven by revenue mix, partially offset by $5 million of restructuring and non-cash impairment charges in the current year.

Corporate Expenses and Eliminations

Our operating loss from corporate expenses and eliminations increased by $49 million to $380 million for the fiscal year ended September 30, 2025 from $331 million for the fiscal year ended September 30, 2024.

The increase is primarily due to an increase in depreciation of $13 million, incremental investment in technology of $5 million, restructuring and non-cash impairment charges associated with the Strategic Restructuring Plan of $11 million, and higher expenses related to transformation initiatives of $23 million, partially offset by the Executive Transition Costs of $7 million in the prior year and lower non-cash stock-based compensation and other related costs of $15 million.

The increase is primarily due to an increase in restructuring and non-cash impairment charges associated with the Company’s restructuring plans of $20 million, an increase in depreciation of $13 million, higher non-cash stock-based compensation and other related costs of $9 million and executive transition costs of $4 million, partially offset by a decrease in finance transformation costs of $6 million.

Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $7 million to $187 million for the fiscal year ended September 30, 2025 from $180 million for the fiscal year ended September 30, 2024 primarily due to the operating loss factors noted above.

Our operating loss from corporate expenses and eliminations increased by $64 million to $285 million for the fiscal year ended September 30, 2023 from $221 million for the fiscal year ended September 30, 2022, primarily due to incremental investment in technology of $12 million, higher depreciation of $14 million, recovery of legal expenses for the Copyright Settlement in the prior year of $13 million, higher non-cash stock-based compensation and other related expenses of $10 million, the Executive Transition Costs of $7 million and higher expenses related to transformation initiatives of $7 million, partially offset by the impact of an additional week in the prior year.

Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $25 million to $155 million for the fiscal year ended September 30, 2023 from $130 million for the fiscal year ended September 30, 2022 due to the operating loss factors noted above.

FINANCIAL CONDITION AND LIQUIDITY

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The following table summarizes our historical cash flows (in millions).

The financial data for fiscal years ended September 30, 2024, 2023 and 2022 have been derived from our consolidated financial statements included elsewhere herein.

The financial data for the fiscal years ended September 30, 2025 and September 30, 2024 have been derived from our consolidated financial statements included elsewhere herein.

Fiscal Year Ended September 30,

2024 2023 2022

Cash provided by (used in):

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Operating Activities

Cash provided by operating activities was $754 million for the fiscal year ended September 30, 2024 compared to $687 million for the fiscal year ended September 30, 2023 and $742 million for the fiscal year ended September 30, 2022.

The $67 million, or 10%, increase in cash provided by operating activities during the current year was primarily due to timing of working capital largely driven by a higher restructuring liability due to the timing of severance payments related to the Strategic Restructuring Plan.

The decrease in cash provided by operating activities for the fiscal year ended September 30, 2023 compared to the fiscal year ended September 30, 2022 was primarily due to timing of working capital, higher cash interest payments due to higher debt balance and higher interest on variable rate debt and higher cash taxes due to lower available foreign tax credits to shield U.S.

taxable income coupled with higher forecasted taxable income.

Cash provided by operating activities was $678 million for the fiscal year ended September 30, 2025 compared to $754 million for the fiscal year ended September 30, 2024.

The $76 million, or 10%, decrease in cash provided by operating activities during the current year was primarily due to timing of working capital, increased royalty payments to artists, and severance payments related to the 2024 Strategic Restructuring Plan, partially offset by higher cash receipts from digital service providers.

Investing Activities

Cash used in investing activities was $311 million for the fiscal year ended September 30, 2024 compared to $300 million for the fiscal year ended September 30, 2023 and $824 million for the fiscal year ended September 30, 2022.

Cash used in investing activities of $311 million for the fiscal year ended September 30, 2024 consisted of $40 million relating to investments and acquisitions of businesses, $187 million to acquire music-related assets, and $116 million relating to capital expenditures, partially offset by $19 million of proceeds from divestitures and $13 million of proceeds from the sale of investments.

Cash used in investing activities was $340 million for the fiscal year ended September 30, 2025 compared to $311 million for the fiscal year ended September 30, 2024.

Cash used in investing activities of $340 million for the fiscal year ended September 30, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $195 million to acquire music-related assets, and $139 million relating to capital expenditures, partially offset by $40 million of proceeds from the sale of investments.

Cash used in investing activities of $824 million for the fiscal year ended September 30, 2022 consisted of $509 million relating to investments and acquisitions of businesses, a portion of which was debt-financed, $191 million to acquire music-related assets, a portion of which was debt-financed, and $135 million relating to capital expenditures, partially offset by $11 million of proceeds from the sale of investments.

Financing Activities

Cash used in financing activities was $396 million for the fiscal year ended September 30, 2024 compared to cash used in financing activities of $325 million for the fiscal year ended September 30, 2023 and cash provided by financing activities of $188 million for the fiscal year ended September 30, 2022.

Cash used in financing activities was $497 million for the fiscal year ended September 30, 2025 compared to cash used in financing activities of $396 million for the fiscal year ended September 30, 2024.

The $497 million of cash used in financing activities for the fiscal year ended September 30, 2025 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $23 million, dividends paid of $383 million, deferred financing costs of $2 million, distributions to noncontrolling interest holders of $15 million, taxes paid to net share settle restricted stock units and Class A common shares of $20 million, common stock repurchased and retired of $16 million, redemption of noncontrolling interests of $37 million, and repayment of the Term Loan Mortgage of $1 million.

The $396 million of cash used in financing activities for the fiscal year ended September 30, 2024 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $20 million, dividends paid of $361 million, deferred financing costs of $2 million, distributions to noncontrolling interest holders of $8 million, and taxes paid to net share settle restricted stock units and Class A common shares of $5 million.

The $325 million of cash used in financing activities for the fiscal year ended September 30, 2023 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $133 million, repayment of Senior Term Loan Facility Tranche H loans of $150 million, dividends paid of $340 million, deferred financing costs of $3 million, distributions to noncontrolling interest holders of $12 million, redemption of noncontrolling interest of $1 million and repayment of Term Loan Mortgage of $1 million, partially offset by proceeds from the Senior Term Loan Facility Tranche G loans of $149 million, proceeds from the Senior Term Loan Facility Tranche H loans of $147 million and proceeds from the Term Loan Mortgage of $19 million.

The $188 million of cash provided by financing activities for the fiscal year ended September 30, 2022 consisted of proceeds from debt issuance of $535 million, which was used to fund the acquisition of a business and music-related assets, partially offset by dividends paid of $318 million, taxes paid related to net share settlement of restricted stock units of $6 million, deferred financing costs of $5 million, cash paid to settle deferred and contingent consideration of $7 million, distributions to noncontrolling interest holders of $6 million and other for $5 million.

There were no drawdowns on the Revolving Credit Facility during the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022.

There were no drawdowns on the Revolving Credit Facility or Beethoven Credit Agreement (as defined below) during the fiscal years ended September 30, 2025 and September 30, 2024.

Our primary sources of liquidity are the cash flows generated from our subsidiaries’ operations, available cash and equivalents and funds available for drawing under our Revolving Credit Facility.

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Since Access acquired us in 2011, we have sought to extend the maturity dates on our outstanding indebtedness, reduce interest expense and improve our debt ratings.

For example, our S&P corporate credit rating improved from B in 2017 to BBB- in August 2024 with a stable outlook, and our Moody’s corporate family rating improved from B1 in 2016 to Ba2 in April 2023 with a positive outlook updated in April 2024.

In September 2025, Fitch assigned us a BBB- long-term credit rating with a stable outlook.

3 unchanged sentences

From time to time, we may incur additional indebtedness for, among other things, working capital, repurchasing, redeeming or tendering for existing indebtedness and acquisitions or other strategic transactions.

Tempo Asset-Based Notes

Following its acquisition of Tempo Music on February 5, 2025, the Company holds approximately $311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo Music and secured only by certain music rights owned by Tempo Music and is nonrecourse to the Company and its subsidiaries, other than Tempo Music.

These notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62% until the estimated term of November 30, 2027, with higher interest rates thereafter if the notes are not refinanced by then.

Pursuant to the indenture governing the Asset-Based Notes, the outstanding Asset-Based Notes may be redeemed in whole or in part at any time upon providing notice to the trustee and paying agent.

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 that may from time to time become 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 Beethoven Credit Agreement contains 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.

Term Loan Mortgage Agreement

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On January 31, 2018, Acquisition Corp.

Agreement”) for a senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the “Revolving Credit Facility”).

entered into the revolving credit agreement (as amended by the amendment dated October 9, 2019 and as further amended, amended and restated or otherwise modified from time to time, the “Revolving Credit Agreement”) for a senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the “Revolving Credit Facility”).

On April 3, 2020, Acquisition Corp.

entered into an amendment to the Revolving Credit Agreement (the “Second Amendment”) which, among other things, increased the commitments under the Revolving Credit Facility from an aggregate principal amount of $180 million to an aggregate principal amount of $300 million and extended the final maturity of the Revolving Credit Facility from January 31, 2023 to April 3, 2025.

For a more detailed description of the changes effected by the Second Amendment, see Note 10 to our consolidated financial statements included elsewhere herein.

On March 1, 2021, Acquisition Corp.

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The Fourth Revolving Credit Agreement Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate and other rates for alternate currencies, such as EURIBOR and SONIA.

We utilized the expedients set forth in FASB Topic 848, Reference Rate Reform (“ASC 848”) including those relating to derivative instruments used in hedging relationships.

This transition does not result in a financial impact to our consolidated financial statements.

On November 30, 2023, Acquisition Corp.

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The Revolving Credit Agreement permits loans for general corporate purposes and may also be utilized to issue letters of credit.

The loans under the Revolving Credit Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Revolving Term SOFR”), and other rates for alternate currencies, such as EURIBOR and SONIA, as provided in the Revolving Credit Agreement, subject to a zero floor, plus 1.75% per annum in the case of Initial Revolving Loans (as defined in the Revolving Credit Agreement), or 1.875% per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from

time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0% per annum, plus, in each case, 0.75% per annum in the case of Initial Revolving Loans, or 0.875% per annum in the case of 2020 Revolving Loans;

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

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Voluntary prepayments of borrowings under the Revolving Credit Facility are permitted at any time in certain minimum principal amounts, subject to reimbursement of the lenders’ redeployment costs actually incurred in the case of a prepayment of SOFR-based borrowings other than on the last day of the relevant interest period.

There were no loans outstanding under the Revolving Credit Facility at September 30, 2025.

Senior Term Loan Facility

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On April 14, 2021, Acquisition Corp.

borrowed additional term loans in an amount of $325 million under the Increase Supplement as described further in Note 10 to our consolidated financial statements included elsewhere herein.

borrowed additional term loans in an amount of $325 million under the Increase Supplement.

The Increase Supplement was entered into to provide for the redemption of Acquisition Corp.’s 5.500% Senior Notes due 2026.

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The Senior Term Loan Credit Agreement Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate.

We utilized the expedients set forth in ASC 848, including those relating to derivative instruments used in hedging relationships.

This transition does not result in a financial impact to our consolidated financial statements.

On June 30, 2023, Acquisition Corp.

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has borrowed additional Tranche G term loans in an amount equal to $150 million, the proceeds of which have been used to prepay the Tranche H term loans in full (see “Senior Term Loan Facility Amendment”), for an aggregate principal amount outstanding under the Senior Term Loan Credit Agreement of $1,295 million.

The Company recorded a loss on extinguishment of debt of approximately $4 million for the fiscal year ended September 30, 2024, which represents the remaining unamortized discount and deferred financing costs of the Tranche H term loan.

On December 29, 2023, Acquisition Corp.

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The tranche I term loans shall bear interest at a rate equal to, at Acquisition Corp.’s election (i) the forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Term SOFR”) subject to a zero floor, plus 2.00% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, in each case, subject to a 1.00% floor, plus 1.00% per annum.

In connection with the Fourteenth Amendment, the Company recognized approximately $3 million of expenses associated with fees paid to third parties and capitalized approximately $2 million in fees paid to creditors.

Certain participating lenders were repaid and replaced by new lenders.

The proceeds and repayments of $42 million have been presented in the accompanying consolidated statement of cash flows.

On September 17, 2024, Acquisition Corp.

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The tranche J term loans shall bear interest at a rate equal to, at Acquisition Corp.’s election (i) Term SOFR subject to a zero floor, plus 1.75% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, in each case, subject to a 1.00% floor, plus 1.00% per annum.

In connection with the Fifteenth Amendment, the Company recognized approximately $2 million of expenses associated with fees paid to third parties.

Certain participating lenders were repaid and replaced by new lenders.

The proceeds and repayments of $62 million have been presented in the accompanying consolidated statement of cash flows.

Acquisition Corp.

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Additionally, during any twelve-month period prior to July 15, 2023, the 2.750% Senior Secured Notes may be redeemed pursuant to a Secured Notes Redemption.

As of September 30, 2025, there have been no redemptions on the 2.750% Senior Secured Notes.

3.000% Senior Secured Notes

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Interest on the Additional Notes will accrue at the rate of 3.000% per annum and will be payable semi-annually in arrears on February 15 and August 15, commencing on February 15, 2021.

The Additional Notes have identical terms as (other than the issue date and the issue price) and are fungible with, and treated as a single series of senior secured debt securities with, the 3.000% Senior Secured Notes issued on August 12, 2020 (the “Original Notes”).

The Additional Notes have identical terms as (other than the issue date and the issue price), are fungible with, and are treated as a single series of senior secured debt securities with, the 3.000% Senior Secured Notes issued on August 12, 2020 (the “Original Notes”).

2.250% Senior Secured Notes

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Additionally, during any twelve-month period prior to December 1, 2024, the 3.750% Senior Secured Notes may be redeemed pursuant to a Secured Notes Redemption.

As of September 30, 2025, there have been no redemptions on the 3.750% Senior Secured Notes.

General Terms of Our Indebtedness

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Existing Debt as of September 30, 2025

As of September 30, 2024, our long-term debt, all of which was issued by Acquisition Corp., was as follows (in millions):

As of September 30, 2025, our long-term debt consists of the following (in millions):

Revolving Credit Facility (a) $ —

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Mortgage Term Loan due 2033 17

Total long-term debt, including the current portion $ 4,048

Issuance premium less unamortized discount and unamortized deferred financing costs (34)

Total Acquisition Corp.

debt, including the current portion

Premium less unamortized discount and unamortized deferred financing costs

Total Acquisition Corp.

long-term debt, including the current portion, net

Beethoven JV Credit Agreement (b)

Tempo Asset-Based Notes due 2050

Unamortized discount

Total asset-based long-term debt, including the current portion, net (c)

Total long-term debt, including the current portion, net $ 4,365

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

There were no loans outstanding under the Revolving Credit Facility at September 30, 2024.

There were no loan outstanding under the Revolving Credit Facility at September 30, 2025.

(b) Reflects $500 million of commitments under the Beethoven JV Credit Agreement.

There were no loans outstanding under the Beethoven JV Credit Agreement at September 30, 2025.

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

There are currently no amounts outstanding under the Beethoven Credit Agreement.

Repurchase Program

On November 14, 2024, the Company’s board of directors authorized a new $100 million share repurchase program (the “Share Repurchase Program”), which is intended to offset dilution from the Omnibus Incentive Plan.

The $100 million share repurchase authorization does not obligate the Company to purchase any shares and the Share Repurchase Program does not have a fixed expiration date.

As of September 30, 2025, approximately $84 million of the $100 million share repurchase authorization remained available.

The Company repurchased and retired 477,281 shares for $16 million during the f iscal year ended September 30, 2025.

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 August 15, 2024, 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 on September 4, 2024.

On November 8, 2024, 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, payable on December 3, 2024 to stockholders of record as of the close of business on November 19, 2024.

The Company paid cash dividends to stockholders and participating security holders of $361 million, $340 million and $318 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.

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

On November 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, as well as related payments under certain stock-based compensation plans, payable on December 2, 2025 to stockholders of record as of the close of business on November 19, 2025.

The Company paid cash dividends to stockholders and participating security holders of $383 million and $361 million for the fiscal years ended September 30, 2025 and 2024, respectively.

Covenant Compliance

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of September 30, 2024.

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

On January 18, 2019, we delivered a notice to the trustee under the 2012 Secured Indenture and 2014 Unsecured Indenture changing the Fixed GAAP Date, as defined under the indentures, to October 1, 2018.

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Depreciation and amortization 376 327 104 83

Loss on extinguishment of debt (a) — 4 — —

Net losses (gains) on divestitures and sale of securities (b) (42) (42) — —

Restructuring costs (c) 133 58 81 9

Net hedging and foreign exchange (gains) losses (d) 74 43 54 (37)

Net losses (gains) on divestitures and sale of securities

(30) (42) (1) —

Restructuring and severance (a)

107 133 92 81

Net hedging and foreign exchange (gains) losses (b)

Transaction costs

Business optimization expenses (e)

Non-cash stock-based compensation expense (f)

Other non-cash charges (g)

Pro forma impact of cost savings initiatives and specified transactions (h)

Business optimization expenses (c)

Non-cash stock-based compensation expense (d)

Other non-cash charges (e)

142 54 37 (3)

Unrestricted subsidiary income

Pro forma impact of cost savings initiatives and specified transactions (f)

294 150 69 34

Adjusted EBITDA $ 1,752 $ 1,619 $ 471 $ 395

Senior Secured Indebtedness (i)

Leverage Ratio (j)

Senior Secured Indebtedness (g)

Leverage Ratio (h)

______________________________________

(a) Reflects loss on extinguishment of debt, primarily including tender fees and unamortized deferred financing costs.

(b) Reflects net gains on sale of securities and divestitures.

(c) Reflects severance costs and other restructuring related expenses, including those related to the Strategic Restructuring Plan and 2023 Restructuring Plan as well as the Executive Transition Costs in the prior year.

(d) Reflects unrealized losses (gains) due to foreign exchange on our Euro-denominated debt, losses (gains) from foreign currency forward exchange contracts and intercompany transactions.

(e) Reflects costs associated with our transformation initiatives and IT system updates, which includes costs of $20 million and $76 million related to our finance transformation for the three and twelve months ended September 30, 2024, respectively, as well as $14 million and $53 million for the three and twelve months ended September 30, 2023, respectively.

(f) Reflects non-cash stock-based compensation expense related to the Omnibus Incentive Plan and the Warner Music Group Corp.

Senior Management Free Cash Flow Plan in the prior year.

(g) Reflects non-cash activity, including the unrealized losses (gains) on the mark-to-market adjustment of equity investments, investment losses (gains) and $50 million of non-cash impairment losses resulting from the Strategic Restructuring Plan in the current year.

(h) Reflects expected savings resulting from transformation initiatives, including the Strategic Restructuring Plan and the 2023 Restructuring Plan, and the pro forma impact of certain specified transactions for the three and twelve months ended September 30, 2024.

(a) Reflects severance costs and other restructuring related expenses, including those related to the Company’s restructuring plans as well as the executive transition costs in the current and prior year.

(b) Reflects unrealized losses (gains) due to foreign exchange on our Euro-denominated debt, losses (gains) from foreign currency forward exchange contracts and intercompany transactions.

(c) Reflects costs associated with our transformation initiatives and technology system updates, which includes costs of $17 million and $70 million related to our finance transformation for the three and twelve months ended September 30, 2025, respectively, as well as $20 million and $76 million for the three and twelve months ended September 30, 2024, respectively.

(d) Reflects non-cash stock-based compensation expense related to the Omnibus Incentive Plan.

(e) Reflects non-cash activity, including the unrealized losses (gains) on the mark-to-market adjustment of equity investments, investment losses (gains) and $60 million of non-cash impairment losses resulting from the Company’s restructuring plans as well as an impairment charge of $79 million for long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025.

(f) Reflects expected savings resulting from transformation initiatives, including the 2025 Restructuring Plan, the 2024 Strategic Restructuring Plan, and the 2023 Restructuring Plan, as well as the pro forma impact of certain specified transactions for the three and twelve months ended September 30, 2025.

Certain of these cost savings initiatives and transactions impacted quarters prior to the quarter during which they were identified within the last twelve-month period.

The pro forma impact of these specified transactions and initiatives resulted in a $59 million increase in the twelve months ended September 30, 2024 Adjusted EBITDA.

(i) Reflects the balance of senior secured debt at Acquisition Corp.

of approximately $4.014 billion less cash of $694 million.

(j) Reflects the ratio of Senior Secured Indebtedness, including Revolving Credit Agreement Indebtedness, to Adjusted EBITDA.

The pro forma impact of

these specified transactions and initiatives resulted in a $125 million increase in the twelve months ended September 30, 2025 Adjusted EBITDA.

(g) Reflects the balance of senior secured debt at Acquisition Corp.

of approximately $4.063 billion less cash of $516 million, which excludes cash and debt held at Tempo Music, a restricted subsidiary.

(h) Reflects the ratio of Senior Secured Indebtedness, including Revolving Credit Agreement Indebtedness, to Adjusted EBITDA.

This is calculated net of cash and equivalents of the Company as of September 30, 2025 not exceeding $750 million in accordance with the Sixth Revolving Credit Agreement Amendment as described further in Note 10.

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The Company’s Revolving Credit Facility does not impose any “leverage ratio” maintenance requirement on the Company when the aggregate principal amount of borrowings and drawings under letters of credit, which have not been reimbursed under the Revolving Credit Facility, is less than or equal to $140 million at the end of a fiscal quarter.

On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were

suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein.

On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein.

In connection with the acquisition of Tempo Music, the acquired entity was designated as an unrestricted subsidiary, and therefore net income and Adjusted EBITDA do not include the results of Tempo Music, and the Asset-Based Notes issued by a subsidiary of Tempo Music are not included in our indebtedness for purposes of calculating the Leverage Ratio.

Management believes that funds generated from our operations and borrowings under the Revolving Credit Facility and available cash and equivalents will be sufficient to fund our debt service requirements, working capital requirements and capital expenditure requirements for the foreseeable future.

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Interest on Term Loan Mortgage (1) 1 1 1 2 5

Tempo Asset-Based Notes (1) (5)

— — — 311 311

Interest on Tempo Asset-Based Notes (1) (5)

15 31 37 383 466

Operating leases (2) 53 112 76 42 283

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The following is a description of our firmly committed contractual obligations at September 30, 2025:

(1) Outstanding debt obligations consist of the Senior Secured Notes, Senior Term Loan Facility and the Term Loan Mortgage.

(1) Outstanding debt obligations consist of the Senior Secured Notes, Senior Term Loan Facility, the Term Loan Mortgage, and the Tempo Asset-Based Notes .

These obligations have been presented based on the principal amounts due as of September 30, 2025.

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We are unable to accurately predict when these amounts will be realized or released.

(5) Outstanding debt obligations related to Tempo Asset-Based Notes, including the estimated timing and effect of those obligations, reflect the contractual repayment date of November 2050.

* Because the timing of payment, and even whether payment occurs, is dependent upon the timing of delivery of albums and musical compositions, the timing and amount of payment of these commitments as presented in the above summary can vary significantly.

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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 7. Management’s Discussion and Analysis