What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2026-02-09 · 306 added, 147 removed, 540 unchanged (46% of the section changed)

41 unchanged sentences

Class A common stock, $ 0.001 par value;

1,000,000 shares authorized, 146,146 and 146,906 shares issued and outstanding as of December 31, 2025 and September 30, 2025, respectively

1,000,000 shares authorized, 146,235 and 146,906 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively

Class B common stock, $ 0.001 par value;

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

1,000,000 shares authorized, 375,380 issued and outstanding as of March 31, 2026 and September 30, 2025, respectively

Additional paid-in capital 2,134 2,166

11 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

Revenue $ 1,732 $ 1,484 $ 3,572 $ 3,150

8 unchanged sentences

Operating income 264 168 552 382

Loss on extinguishment of debt ( 7 ) — ( 7 ) —

Interest expense, net ( 41 ) ( 39 ) ( 86 ) ( 76 )

Other income 3 153

Other income (expense) 38 ( 64 ) 41 89

Income before income taxes 254 65 500 395

3 unchanged sentences

Net income attributable to Warner Music Group Corp.

$ 183 $ 36 $ 359 $ 272

Net income per share attributable to common stockholders:

Class A – Basic and Diluted $ 0.33 $ 0.45

Class B – Basic and Diluted $ 0.33 $ 0.45

Class A – Basic

$ 0.35 $ 0.07 $ 0.68 $ 0.52

Class A – Diluted

$ 0.34 $ 0.07 $ 0.67 $ 0.52

Class B – Basic

$ 0.35 $ 0.07 $ 0.68 $ 0.52

Class B – Diluted

$ 0.34 $ 0.07 $ 0.67 $ 0.52

Weighted average common shares:

Class A – Basic and Diluted 146,755 143,053

Class A – Basic

146,573 144,938 146,664 143,995

Class A – Diluted

149,323 144,938 149,414 143,995

Class B – Basic and Diluted 375,380 375,380 375,380 375,380

6 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

Net income $ 181 $ 36 $ 356 $ 277

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency adjustment ( 45 ) 84 ( 36 ) ( 45 )

Other comprehensive income (loss), net of tax 9 ( 129 )

Other comprehensive (loss) income, net of tax ( 45 ) 84 ( 36 ) ( 45 )

Total comprehensive income 136 120 320 232

1 unchanged sentence

Comprehensive income attributable to Warner Music Group Corp.

$ 138 $ 120 $ 323 $ 227

See accompanying notes

2 unchanged sentences

(In millions)

Three Months Ended

Six Months Ended

Cash flows from operating activities

3 unchanged sentences

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

( 41 ) ( 40 )

Deferred income taxes 39 24

Loss on extinguishment of debt 7 —

Net gain on investments

3 unchanged sentences

Non-cash impairments

Remeasurement of share-settled liability

Changes in operating assets and liabilities:

8 unchanged sentences

Deferred revenue 166 69

Income taxes payable

Other balance sheet changes, net

( 34 ) ( 23 )

Net cash provided by operating activities 566 401

8 unchanged sentences

Cash flows from financing activities

Proceeds from Senior Term Loan A Facility

Repayment of Senior Term Loan B Facility

Proceeds from Beethoven Credit Agreement

6 unchanged sentences

Taxes paid related to net share settlement of restricted stock units and common stock

( 26 ) ( 19 )

Common stock repurchased and retired

Other financing activity

Net cash used in financing activities ( 159 ) ( 127 )

Net cash provided by (used in) financing activities 169 ( 248 )

Effect of exchange rate changes on cash and equivalents ( 2 ) ( 8 )

Cash balances classified as assets held for sale ( 16 ) —

Net increase in cash and equivalents 216 108

Effect of change in cash balances classified as assets held for sale

Net increase (decrease) in cash and equivalents 209 ( 57 )

Cash and equivalents at beginning of period 532 694

4 unchanged sentences

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

Three Months Ended December 31, 2025

Six Months Ended March 31, 2026

Common Stock Class B

4 unchanged sentences

Equity Non-controlling

Interest Total

Equity Redeemable Non-controlling Interest

Interest Total Equity Redeemable Non-controlling Interest

Shares Value Shares Value

1 unchanged sentence

Net income — — — — — 359 — 359 ( 2 ) 357 ( 1 )

Other comprehensive income, net of tax

— — — — — — 9 9 — 9 —

Other comprehensive loss, net of tax — — — — — — ( 36 ) ( 36 ) — ( 36 ) —

Dividends ($ 0.38 per share)

— — — — — ( 200 ) — ( 200 ) — ( 200 ) —

Stock-based compensation

— — — — 19 — — 19 — 19 —

Stock-based compensation expense — — — — 31 — — 31 — 31 —

Distribution to noncontrolling interest holders — — — — — — — — ( 7 ) ( 7 ) —

Vesting of restricted stock units, net of shares withheld for employee taxes 999 — — — ( 26 ) — — ( 26 ) — ( 26 ) —

160 — — — ( 5 ) — — ( 5 ) — ( 5 ) —

Common shares repurchased and retired ( 1,671 ) — — — ( 48 ) — — ( 48 ) — ( 48 ) —

Contributions from redeemable non-controlling interest holders

Redemption of noncontrolling interests

— — — — 11 — — 11 — 11 —

Balance at December 31, 2025 146,146 $ — 375,380 $ 1 $ 2,154 $ ( 1,255 ) $ ( 180 ) $ 720 $ 104 $ 824 $ 5

Three Months Ended December 31, 2024

Contributions from redeemable non-controlling interest holders — — — — — — — — — — 134

Balance at March 31, 2026 146,235 $ — 375,380 $ 1 $ 2,134 $ ( 1,172 ) $ ( 225 ) $ 738 $ 101 $ 839 $ 133

Three Months Ended March 31, 2026

Common Stock Class B

4 unchanged sentences

Equity Non-controlling

Interest Total

Equity Redeemable Non-controlling Interest

Interest Total Equity Redeemable Non-controlling Interest

Shares Value Shares Value

Balance at December 31, 2025 146,146 $ — 375,380 $ 1 $ 2,154 $ ( 1,255 ) $ ( 180 ) $ 720 $ 104 $ 824 $ 5

Net income — — — — — 183 — 183 ( 1 ) 182 ( 1 )

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

Dividends ($ 0.19 per share)

— — — — — ( 100 ) — ( 100 ) — ( 100 ) —

Stock-based compensation expense — — — — 12 — — 12 — 12 —

Distribution to noncontrolling interest holders — — — — — — — — ( 2 ) ( 2 ) —

Vesting of restricted stock units, net of shares withheld for employee taxes 840 — — — ( 21 ) — — ( 21 ) — ( 21 ) —

Common shares repurchased and retired ( 751 ) — — — ( 22 ) — — ( 22 ) — ( 22 ) —

Redemption of noncontrolling interests

— — — — 11 — — 11 — 11 —

Contributions from redeemable non-controlling interest holders — — — — — — — — — — 129

Balance at March 31, 2026 146,235 $ — 375,380 $ 1 $ 2,134 $ ( 1,172 ) $ ( 225 ) $ 738 $ 101 $ 839 $ 133

Six Months Ended March 31, 2025

Common Stock Class B

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Non-controlling

Interest Total Equity

Redeemable Non-controlling Interest

Shares Value Shares Value

Balance at September 30, 2024 142,559 $ — 375,380 $ 1 $ 2,077 $ ( 1,313 ) $ ( 247 ) $ 518 $ 157 $ 675 $ —

3 unchanged sentences

— — — — — ( 189 ) — ( 189 ) — ( 189 ) —

Stock-based compensation

Stock-based compensation expense

— — — — 34 — — 34 — 34 —

Distribution to noncontrolling interest holders — — — — — — — — ( 8 ) ( 8 ) —

Vesting of restricted stock units, net of shares withheld 64 — — — ( 2 ) — — ( 2 ) — ( 2 ) —

Shares issued under the Plan

Acquisition of noncontrolling interests

— — — — — — — — 74 74 —

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

795 — — — ( 19 ) — — ( 19 ) — ( 19 ) —

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

Common shares repurchased and retired

( 60 ) — — — ( 2 ) — — ( 2 ) — ( 2 ) —

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

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

Three Months Ended March 31, 2025

Common Stock Class B

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Equity Non-controlling

Interest Total Equity Redeemable Non-controlling Interest

Shares Value Shares Value

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

Net income — — — — — 36 — 36 — 36 —

Other comprehensive income, net of tax — — — — — — 84 84 — 84 —

Dividends ($ 0.18 per share)

— — — — — ( 95 ) — ( 95 ) — ( 95 ) —

Stock-based compensation expense

— — — — 14 — — 14 — 14 —

Acquisition of noncontrolling interests

— — — — — — — — 74 74 —

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

731 — — — ( 17 ) — — ( 17 ) — ( 17 ) —

Other — — — — — — — — ( 3 ) ( 3 ) —

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

See accompanying notes

24 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026.

Operating results for the three and six months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026.

The consolidated balance sheet at September 30, 2025 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S.

4 unchanged sentences

All intercompany balances and transactions have been eliminated.

As of December 31, 2025 and September 30, 2025, there were approximately $ 59 million and $ 65 million of assets, respectively, related to variable interest entities (“VIEs”) included in our condensed consolidated balance sheets.

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

As of March 31, 2026 and September 30, 2025, there were approximately $ 59 million and $ 65 million of assets, respectively, related to variable interest entities (“VIEs”) included in our condensed consolidated balance sheets.

As of both March 31, 2026 and September 30, 2025, there was approximately $ 2 million of liabilities related to VIEs included in our condensed consolidated balance sheets.

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

Noncontrolling Interests

Interests held by third parties in consolidated subsidiaries are presented as noncontrolling interests, which represents the noncontrolling shareholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries.

Interests held by third parties in consolidated subsidiaries are presented as noncontrolling interests, which represent the noncontrolling shareholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries.

Noncontrolling interests that are not redeemable are reported in the equity section of the Consolidated Balance Sheets.

Noncontrolling interests, where the Company may be required to redeem the noncontrolling interest under contractual redemption requirements that are not solely within the control of Company, are reported in the Consolidated Balance Sheets between liabilities and equity, as redeemable noncontrolling interests.

Noncontrolling interests, where the Company may be required to redeem the noncontrolling interest under contractual redemption requirements that are not solely within the control of the Company, are reported in the Consolidated Balance Sheets between liabilities and equity, as redeemable noncontrolling interests.

The Company adjusts the redeemable noncontrolling interests to the higher of the current redemption value or the carrying value of the interests, the capital contributed by the third party adjusted for the noncontrolling interest’s share of net income (loss) and distributions, on each balance sheet date with changes in redemption value recognized as an adjustment to retained earnings attributable to common shareholders.

26 unchanged sentences

Basic earnings per share is computed by dividing net income available to each class of stock, less earnings available to participating securities, divided by the weighted average number of outstanding common shares for each class of stock.

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

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

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

Three Months Ended December 31,

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

The potentially dilutive common shares had a dilutive effect on the Company’s EPS calculation for the three and six months ended March 31, 2026 and 2025.

The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three and six months ended March 31, 2026 and 2025 (in millions, except share amounts, which are reflected in thousands, and per share data):

Three Months Ended March 31,

Class A Class B Class A Class B

Basic and Diluted EPS:

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

$ 53 $ 130 $ 10 $ 26

Net loss attributable to participating securities (a)

Net loss (income) attributable to participating securities (a)

Net income (loss) attributable to common stockholders - Basic

$ 51 $ 130 $ 10 $ 26

Net income (loss) attributable to common stockholders

Net loss (income) attributable to shares to be issued on redemption of noncontrolling interests

( 1 ) ( 1 ) — —

Weighted average shares outstanding 146,755 375,380 143,053 375,380

Basic and Diluted Earnings Per Share (b)

Net income (loss) attributable to common stockholders - Diluted

$ 50 $ 129 $ 10 $ 26

Weighted average shares outstanding - Basic

146,573 375,380 144,938 375,380

Shares to be issued on redemption of noncontrolling interests

Weighted average shares outstanding - Diluted

149,323 375,380 144,938 375,380

Earnings Per Share - Basic

$ 0.35 $ 0.35 $ 0.07 $ 0.07

Earnings Per Share - Diluted

$ 0.34 $ 0.34 $ 0.07 $ 0.07

Six Months Ended March 31,

Class A Class B Class A Class B

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

$ 103 $ 256 $ 78 $ 194

Net loss (income) attributable to participating securities (a)

( 4 ) — ( 3 ) —

Net income (loss) attributable to common stockholders - Basic

$ 99 $ 256 $ 75 $ 194

Net loss (income) attributable to shares to be issued on redemption of noncontrolling interests

( 1 ) ( 3 ) — —

Net income (loss) attributable to common stockholders - Diluted

$ 98 $ 253 $ 75 $ 194

Weighted average shares outstanding - Basic

146,664 375,380 143,995 375,380

Shares to be issued on redemption of noncontrolling interests

Weighted average shares outstanding - Diluted

149,414 375,380 143,995 375,380

Earnings Per Share - Basic

$ 0.68 $ 0.68 $ 0.52 $ 0.52

Earnings Per Share - Diluted

$ 0.67 $ 0.67 $ 0.52 $ 0.52

______________________________________

(a) Participating securities include unvested restricted stock units, which include the right to receive non-forfeitable dividend equivalents.

Participating securities are not contractually obligated to share in losses.

(b) For the three months ended December 31, 2025, the weighted average shares outstanding for Diluted EPS includes the dilutive effect of approximately 2,750 shares.

As the resulting Diluted EPS rounds to the same reported amount as Basic EPS, both Basic and Diluted EPS for the three months ended December 31, 2025 are presented as $ 0.33 per share.

There were no dilutive potentially issuable shares for the three months ended December 31, 2024.

Revenue Recognition

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

(in millions)

3 unchanged sentences

Total digital and physical

1,112 953 2,240 1,992

Artist services and expanded-rights 164 117 395 313

5 unchanged sentences

Synchronization 50 49 110 88

Other 4 4 9 11

Total Music Publishing 353 310 715 633

5 unchanged sentences

Music Publishing 178 161 368 334

743 658 1,510 1,363

International Recorded Music 815 678 1,718 1,491

1 unchanged sentence

Total international

990 827 2,065 1,790

Intersegment eliminations ( 1 ) ( 1 ) ( 3 ) ( 3 )

2 unchanged sentences

Sales Returns and Uncollectible Accounts

Based on management’s analysis of sales returns, refund liabilities of $ 21 million and $ 17 million were established at December 31, 2025 and September 30, 2025, respectively.

Based on management’s analysis of estimated credit losses, reserves of $ 28 million and $ 27 million were established at December 31, 2025 and September 30, 2025, respectively.

Based on management’s analysis of sales returns, refund liabilities of $ 16 million and $ 17 million were established at March 31, 2026 and September 30, 2025, respectively.

Based on management’s analysis of estimated credit losses, reserves of $ 28 million and $ 27 million were established at March 31, 2026 and September 30, 2025, respectively.

Deferred Revenue

Deferred revenue increased by $ 142 million during the three months ended December 31, 2025 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period.

Revenues of $ 127 million were recognized during the three months ended December 31, 2025 related to the balance of deferred revenue at September 30, 2025.

Deferred revenue increased by $ 540 million during the six months ended March 31, 2026 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period.

Revenues of $ 186 million were recognized during the six months ended March 31, 2026 related to the balance of deferred revenue at September 30, 2025.

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

Performance Obligations

For the three months ended December 31, 2025 and December 31, 2024, the Company recognized revenue of $ 18 million and $ 40 million, respectively, from performance obligations satisfied in previous periods.

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at December 31, 2025 are as follows:

For the three months ended March 31, 2026 and March 31, 2025, the Company recognized revenue of $ 20 million and $ 17 million, respectively, from performance obligations satisfied in previous periods.

For the six months ended March 31, 2026 and March 31, 2025, the Company recognized revenue of $ 38 million and $ 57 million, respectively, from performance obligations satisfied in previous periods.

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at March 31, 2026 are as follows:

Rest of FY26 FY27 FY28 Thereafter Total

11 unchanged sentences

Other comprehensive loss ( 45 ) — ( 45 )

Balances at December 31, 2024 $ ( 373 ) $ ( 3 ) $ ( 376 )

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

Balances at September 30, 2025 $ ( 188 ) $ ( 1 ) $ ( 189 )

Other comprehensive income 9 — 9

Balances at December 31, 2025 $ ( 179 ) $ ( 1 ) $ ( 180 )

Other comprehensive loss ( 36 ) — ( 36 )

Balances at March 31, 2026 $ ( 224 ) $ ( 1 ) $ ( 225 )

______________________________________

7 unchanged sentences

Other adjustments (a) ( 11 ) — ( 11 )

Balances at December 31, 2025 $ 1,599 $ 464 $ 2,063

Balances at March 31, 2026 $ 1,590 $ 464 $ 2,054

______________________________________

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

(a) Other adjustments during the six months ended March 31, 2026 represent foreign currency movements.

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

3 unchanged sentences

Intangible assets consist of the following:

Weighted-Average Useful Life December 31,

Weighted-Average Useful Life March 31,

2026 September 30,

12 unchanged sentences

Total net intangible assets $ 3,254 $ 2,879

The increase in net intangible assets during the six months ended March 31, 2026 is primarily related to the acquisitions of recorded music catalogs and music publishing copyrights for approximately $ 401 million through the Beethoven joint venture.

See Note 7 and Note 11 for additional information regarding the structure and activities of the joint venture.

Debt Capitalization

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

As of March 31, 2026, our long-term debt consists of the following:

2026 September 30,

1 unchanged sentence

Revolving Credit Facility (a) $ — $ —

Senior Term Loan Facility due 2031 1,295 1,295

Senior Term Loan A Facility due 2031 (b)

Senior Term Loan B Facility due 2031 (b)

2.750 % Senior Secured Notes due 2028

8 unchanged sentences

long-term debt, including the current portion, net $ 4,046 $ 4,063

Beethoven Credit Agreement (b)

Tempo Asset-Based Notes due 2050 (c)

Beethoven Credit Agreement (c)

Tempo Asset-Based Notes due 2050 (d)

Unamortized discount

2 unchanged sentences

______________________________________

(a) Reflects $ 350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at December 31, 2025 and September 30, 2025.

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

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

There were $ 4 million in loans outstanding under the Beethoven Credit Agreement at December 31, 2025.

(a) Reflects $ 350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at March 31, 2026 and September 30, 2025.

There were no loans outstanding under the Revolving Credit Facility as of March 31, 2026 and September 30, 2025.

(b) On March 11, 2026, Acquisition Corp.

borrowed all of the Term Loan A Facility to repay all of the outstanding loans under the Term Loan B Facility.

(c) Reflects $ 500 million of commitments under the Beethoven Credit Agreement with the ability, subject to the consent of the Lenders (as defined below), to increase the size of the facility to $ 700 million.

There were $ 370 million in loans outstanding under the Beethoven Credit Agreement at March 31, 2026.

Loans outstanding under the Beethoven Credit Agreement are secured only by certain music rights owned by Beethoven JV 1, LLC, a Delaware limited liability company (“Beethoven”), and are nonrecourse to the Company and its subsidiaries, other than Beethoven.

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

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

Acquisition Corp.

2 unchanged sentences

Acquisition Corp.

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

Additionally, as of December 31, 2025 Acquisition Corp.

is party to and the borrower under a $ 1,295 million term loan A facility and a $ 350 million revolving facility, pursuant to an amended and restated credit agreement dated March 11, 2026 (the “Credit Agreement”), with JPMorgan Chase Bank NA, as administrative agent, and the other financial institutions and lenders from time to time party thereto.

Additionally, as of March 31, 2026, Acquisition Corp.

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

5 unchanged sentences

The Company and Holdings are holding companies that conduct substantially all of their business operations through Acquisition Corp.

Accordingly, while Acquisition Corp.

Acquisition Corp.

and its subsidiaries are not currently restricted from distributing funds to the Company and Holdings under the indentures for the Acquisition Corp.

Notes or the credit agreements for the Acquisition Corp.

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

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

Notes or the Credit Agreement for the Acquisition Corp.

credit facilities, including the Revolving Credit Facility (as defined below) and the Tranche A Term Loans (as defined below).

The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Tranche A Term Loans as of March 31, 2026 .

Other Long-Term Debt

2 unchanged sentences

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

As of December 31, 2025, Tempo Music is in compliance with the covenants under the Asset-Based Notes.

As of March 31, 2026, Tempo Music is in compliance with the covenants under the Asset-Based Notes.

Additionally, WMG BC Holdco LLC (“WMGCo”), a wholly-owned indirect subsidiary of the Company, and BCSS W JV Investments (B), L.P.

2 unchanged sentences

The advances under the Beethoven Credit Agreement shall bear interest at the rates described below under “—Interest Rates.” The Beethoven Credit Agreement contains customary affirmative and negative covenants for this type of facility, and the ability, subject to the consent of the Lenders, to increase the size of the facility to $ 700 million.

There were $ 4 million of loans outstanding under the Beethoven Credit Agreement at December 31, 2025.

As of December 31, 2025, the Initial Borrower is in compliance with the covenants under the Beethoven Credit Agreement.

There were $ 370 million of loans outstanding under the Beethoven Credit Agreement at March 31, 2026.

As of March 31, 2026, the Initial Borrower is in compliance with the covenants under the Beethoven Credit Agreement.

On May 5, 2026, the Lenders, pursuant to an amendment to the Beethoven Credit Agreement (the “Credit Agreement Amendment”) agreed to increase the aggregate commitments under the Beethoven Credit Agreement from $ 500 million to $ 750 million.

The Credit Agreement Amendment also provides that, subject to the consent of the Lenders, the Borrowers may further increase the size of the facility up to an aggregate commitment of $ 950 million.

On February 4, 2026, WMGCo entered into an amendment (the “Amendment”) to a Master Operations and Economics Agreement, dated as of June 29, 2025 (as amended from time to time, the “Master Operations and Economics Agreement”), by and among WMGCo, BainCo, and certain affiliates of the foregoing parties.

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

Fiscal 2026 Transactions

March 2026 Credit Agreement Amendment

On March 11, 2026, Acquisition Corp.

entered into the Credit Agreement among Acquisition Corp., as borrower, the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto.

The Credit Agreement amends and restates in its entirety the Credit Agreement, dated as of November 1, 2012, among Acquisition Corp., JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto, and incorporates, as amended and restated, the revolving credit facility provided under the Credit Agreement, dated as of January 31, 2018, among Acquisition Corp., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto.

The Credit Agreement provides for a $ 350 million revolving credit facility (the “Revolving Credit Facility”) and a $ 1,295 million term loan A facility (the “Tranche A Term Loans”).

Subject to certain conditions, Acquisition Corp.

may obtain increases in the commitments under the Revolving Credit Facility and incur incremental term loans.

As of March 31, 2026, Acquisition Corp.

had borrowed all of the Tranche A Term Loans to repay Acquisition Corp.’s term loan B facility.

No amounts were drawn under the Revolving Credit Facility as of March 31, 2026.

In connection with the Credit Agreement, the Company recorded a loss on extinguishment of debt of approximately $ 7 million for the three months ended March 31, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs.

The use of proceeds from the $ 1,295 million Tranche A Term Loans has been presented in the accompanying consolidated statement of cash flows.

The Company recognized deferred financing costs of $ 4 million associated with the amendment.

Interest Rates

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

Agreement), or 1.875 % per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50 % in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0 % per annum, plus, in each case, 0.75 % per annum in the case of Initial Revolving Loans, or 0.875 % per annum in the case of 2020 Revolving Loans;

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

Based on the Senior Secured Indebtedness to EBITDA Ratio of 1.83 x at December 31, 2025, the applicable margin for SOFR loans and risk-free rate loans would be 1.375 % instead of 1.875 % and the applicable margin for ABR loans would be 0.375 % instead of 0.875 % in the case of 2020 Revolving Loans.

The loans under the Credit Agreement bear interest at Acquisition Corp.’s election at a rate equal to (i) a forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“SOFR”), subject to a zero floor, plus the applicable margin, or (ii) an alternative base rate (“ABR”), which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50 % in excess of the overnight federal funds rate and (z) one-month Term SOFR (as defined in the Credit Agreement) plus 1.0 % per annum, in each case, subject to a 1.00 % floor plus the applicable margin.

The applicable margin for the Tranche A Term Loans range from 1.250 % to 1.625 % per annum for SOFR loans and from 0.250 % to 0.625 % per annum for ABR loans, in each case based upon Acquisition Corp.’s issuer credit ratings.

The applicable margin for borrowings under the Revolving Credit Facility ranges from 1.125 % to 1.750 % per annum for SOFR loans and 0.125 % to 0.750 % per annum for ABR loans, in each case based upon Acquisition Corp.’s issuer credit ratings.

Based on the Applicable Debt Rating of BBB- at March 31, 2026, the applicable margin for SOFR loans and risk-free rate loans would be 1.250 % instead of 1.750 % and the applicable margin for ABR loans would be 0.250 % instead of 0.750 % in the case of Initial Revolving Loans, and the applicable margin for SOFR loans and risk-free rate loans would be 1.375 % instead of 1.625 % and the applicable margin for ABR loans would be 0.375 % instead of 0.625 % in the case of the Tranche A Term Loan.

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

Default interest will also be payable on other overdue amounts at a rate of 2.0 % per annum above the amount that would apply to an alternative base rate loan.

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

If there is a payment default at any time, then the interest rate applicable to overdue principal and interest will be the rate otherwise applicable to such loan plus 2.00 % per annum.

Default interest will also be payable on other overdue amounts at a rate of 2.00 % per annum above the amount that would apply to an alternative base rate loan.

The term loan entered into on January 27, 2023 (the “Term Loan Mortgage”) bears interest at a rate of 30-day SOFR plus the applicable margin of 1.40 %, subject to a zero floor.

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

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

Maturity of Senior Term Loan Facility

The loans outstanding under the Senior Term Loan Facility mature on January 24, 2031.

As of March 31, 2026, there are no interest rate swaps outstanding.

Maturity of Tranche A Term Loans

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

Maturity of Revolving Credit Facility

The maturity date of the Revolving Credit Facility is November 30, 2028.

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

Maturities of Senior Secured Notes

As of December 31, 2025, there are no scheduled maturities of notes until 2028, when $ 382 million is scheduled to mature.

As of March 31, 2026, there are no scheduled maturities of notes until 2028, when $ 372 million is scheduled to mature.

Thereafter, $ 2.384 billion is scheduled to mature.

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Interest Expense, net

Total interest expense, net was $ 45 million and $ 37 million for the three months ended December 31, 2025 and 2024, respectively.

Interest expense, net includes interest expense related to our outstanding indebtedness of $ 46 million and $ 43 million for the three months ended December 31, 2025 and 2024, respectively.

The weighted-average interest rate of the Company’s total debt was 4.0 % at December 31, 2025, 4.1 % at September 30, 2025, and 4.2 % at December 31, 2024.

Total interest expense, net was $ 41 million and $ 39 million for the three months ended March 31, 2026 and 2025, respectively, and $ 86 million and $ 76 million for the six months ended March 31, 2026 and 2025, respectively.

Interest expense, net includes interest expense related to our outstanding indebtedness of $ 44 million for both the three months ended March 31, 2026 and 2025, and $ 90 million and $ 87 million for the six months ended March 31, 2026 and 2025, respectively.

The weighted-average interest rate of the Company’s total debt was 4.0 % at March 31, 2026, 4.1 % at September 30, 2025, and 4.1 % at March 31, 2025.

Restructuring and Impairments

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

For the three months ended December 31, 2025, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $ 25 million, of which $ 13 million of expense was recognized in our Recorded Music segment and $ 12 million was recognized in Corporate.

As of December 31, 2025, total cumulative restructuring and impairment charges recognized in connection with the 2025 Strategic Restructuring Plan were $ 143 million with $ 93 million of costs recognized in our Recorded Music segment, $ 5 million of costs recognized in our Music Publishing segment, and $ 45 million recognized in Corporate.

For the three months ended March 31, 2026, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $ 5 million, all of which was recognized in our Recorded Music segment.

For the six months ended March 31, 2026, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $ 30 million, of which $ 18 million of expense was recognized in our Recorded Music segment and $ 12 million was recognized in Corporate.

As of March 31, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2025 Strategic Restructuring Plan were $ 148 million with $ 98 million of costs recognized in our Recorded Music segment, $ 5 million of costs recognized in our Music Publishing segment, and $ 45 million recognized in Corporate.

These costs are composed of $ 120 million of severance costs and $ 28 million of non-cash impairment charges primarily related to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets.

The following table sets forth the activity for the three months ended December 31, 2025 in the restructuring accrual associated with the 2025 Restructuring Plan included within accrued liabilities in the accompanying consolidated balance sheets:

The following table sets forth the activity for the six months ended March 31, 2026 in the restructuring accrual associated with the 2025 Restructuring Plan included within accrued liabilities in the accompanying consolidated balance sheets:

Severance Costs

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Cash payments ( 61 )

Balance at December 31, 2025 $ 75

Balance at March 31, 2026 $ 54

2024 Strategic Restructuring Plan

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

As of 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 in Corporate.

As of March 31, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $ 215 million with $ 206 million of costs recognized in our Recorded Music segment and $ 9 million recognized in Corporate.

These costs are composed of $ 133 million of severance and other contract termination costs, of which $ 7 million was non-cash, and $ 82 million of non-cash impairment charges.

There were no restructuring costs recognized for the three months ended December 31, 2025 related to the 2024 Strategic Restructuring Plan.

The below table sets forth the activity for the three months ended December 31, 2025 in the restructuring accrual associated with the 2024 Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

There was a $ 1 million benefit recognized for the three and six months ended March 31, 2026 related to the 2024 Strategic Restructuring Plan.

The below table sets forth the activity for the six months ended March 31, 2026 in the restructuring accrual associated with the 2024 Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets.

Severance Costs Contract Termination Costs Total

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Balance at September 30, 2025 $ 23 $ 7 $ 30

Restructuring charges ( 1 ) — ( 1 )

Cash payments ( 16 ) ( 4 ) ( 20 )

Balance at December 31, 2025 $ 13 $ 5 $ 18

Balance at March 31, 2026 $ 6 $ 3 $ 9

Other Impairments

For the three months ended December 31, 2025, the Company recognized an impairment charge of $ 9 million within the Recorded Music segment for long-lived assets associated with EMP Merchandising (“EMP”), which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

For the three and six months ended March 31, 2026, the Company recognized an impairment charge of $ 2 million and $ 11 million, respectively, within the Recorded Music segment for long-lived assets associated with EMP Merchandising (“EMP”), which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

Please refer to Note 15 for further discussion.

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

The Company recognized $ 19 million and $ 13 million of non-cash stock-based compensation expense for the three months ended December 31, 2025 and 2024, respectively, which was recorded to additional paid-in capital.

During the three months ended December 31, 2025, the Company satisfied the vesting of PSUs and RSUs by issuing 159,580 shares of Class A Common Stock under the Omnibus Incentive Plan, which is net of shares used to settle employee income tax obligations.

The Company recognized $ 12 million and $ 14 million of non-cash stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively, all of which was recorded to additional paid-in capital.

The Company recognized $ 31 million and $ 27 million of non-cash stock-based compensation expense for the six months ended March 31, 2026 and 2025, respectively, all of which was recorded to additional paid-in capital.

During the three and six months ended March 31, 2026, the Company satisfied the vesting of PSUs and RSUs by issuing 839,801 and 999,381 shares, respectively, of Class A Common Stock under the Omnibus Incentive Plan, which is net of shares used to settle employee income tax obligations.

Share Repurchase Program

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

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

The following table summarizes our total share repurchases and retirement under the Share Repurchase Program during the three and six months ended March 31, 2026 and 2025:

Three Months Ended

December 31, 2025 Three Months Ended

December 31, 2024

March 31, Six Months Ended

Share Repurchase Type

Shares Amount

(in millions) Shares Amount

(in millions)

Open Market Repurchases

2026 2025 2026 2025

Number of shares repurchased

750,500 — 1,670,500 60,383

Amount (in millions)

$ 22 $ — $ 48 $ 2

Redeemable Noncontrolling Interest

As of December 31, 2025, the redeemable noncontrolling interests (“RNCI”) consist of interests in Beethoven, a consolidated subsidiary.

As of March 31, 2026, the redeemable noncontrolling interests (“RNCI”) consist of interests in Beethoven, a consolidated subsidiary.

The Company consolidates Beethoven based on its controlling financial interest of the joint venture through the Company's majority representation on the board.

The noncontrolling interest holder in Beethoven, which is BainCo as described in Note 7, has a 50 % ownership share and is entitled to receive 50 % of the required quarterly distributions made by the joint venture from available cash.

For distributions resulting from a liquidity event, including the sale of the joint venture, an initial public offering, or other liquidity event as defined in the Master Operations and Economics Agreement, the noncontrolling interest holder is entitled to proceeds from such event until its contributed capital is returned with an annualized return of 8 %, after which the Company will receive distributions for an equal amount, with any additional amounts distributed equally.

Beginning on the sixth anniversary of formation, the noncontrolling interest holder has an exit right, that upon providing notice, the Company has the option to acquire the noncontrolling interest holders interest for a price negotiated with noncontrolling interest holder or otherwise determined by an independent fair market valuation, if elected.

For distributions resulting from a liquidity event, including the sale of the joint venture, an initial public offering, or other liquidity event as defined in the Master Operations and Economics Agreement, the noncontrolling interest holder is entitled to proceeds from such event until its contributed capital is returned with an annualized return of 8 %, subject to certain adjustments, after which the Company will receive distributions for an equal amount, with any additional amounts distributed equally.

Beginning on the sixth anniversary of formation, the noncontrolling interest holder has an exit right, that upon providing notice, the Company has the option to acquire the noncontrolling interest holder’s interest for a price negotiated with the noncontrolling interest holder or otherwise determined by an independent fair market valuation, subject to certain adjustments, if elected.

If not acquired by the Company, the noncontrolling interest holder can initiate and complete a sale of Beethoven or an initial public offering that include the interests held by the Company.

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Given the exit rights held by the noncontrolling interest holder may result in the interests being redeemed by the Company based on events that are not solely in its control, the noncontrolling interest is presented in the Consolidated Balance Sheets at the greater of the current estimated redemption value or carrying value of the interests including adjustments for the attribution of income to the noncontrolling interest holder.

The Company adjusts the redeemable noncontrolling interest to the redemption at the end of each reporting period with changes recognized as adjustments to retained earnings.

The Company recognized $ 5 million as the redeemable noncontrolling interest balance as of December 31, 2025.

For the three months ended December 31, 2025, the Company recorded an income tax expense of $ 71 million.

The income tax expense for the three months ended December 31, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S.

state and local taxes, the net impact of GILTI and foreign derived intangible income (“FDII”), and non-deductible executive compensation under IRC Section 162(m).

For the three months ended December 31, 2024, the Company recorded an income tax expense of $ 89 million.

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

The Company adjusts the redeemable noncontrolling interest to the greater of the current estimated redemption value or carrying value at the end of each reporting period, with changes recognized as adjustments to retained earnings.

The Company recognized $ 133 million as the redeemable noncontrolling interest balance as of March 31, 2026.

In the second quarter of fiscal year 2026, the Company sold recorded music catalog rights to Beethoven for consideration of $ 233 million, receiving $ 182 million of cash in return, net of the Company’s portion of contributions to the joint venture for the acquisition.

Given the Company consolidates Beethoven, no gain was recognized, and the cash received is recognized as contributions from redeemable noncontrolling interest holder and issuance of debt under the Beethoven Credit Facility.

For the three and six months ended March 31, 2026, the Company recorded an income tax expense of $ 73 million and $ 144 million, respectively.

The income tax expense for the three and six months ended March 31, 2026 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than in the United States, including withholding taxes, U.S.

state and local taxes, taxable gain on contribution to Beethoven JV, and non-deductible executive compensation under IRC Section 162(m).

These charges were partially offset by tax benefit associated with partial release of valuation allowance on EMP.

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

The income tax expense for the three and six months ended March 31, 2025 is higher than the expected tax expense at the statutory rate of 21% primarily due to foreign income taxed at rates higher than the United States, including withholding taxes, and U.S.

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

These charges were partially offset by tax benefits associated with R&D credits, and the net impact of GILTI and FDII.

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of December 31, 2025 could decrease by up to approximately $ 1 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.

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

The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of March 31, 2026 could decrease by up to approximately $ 1 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months.

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

Numerous countries, including European Union member states, have enacted legislation as of January 1, 2025 and others are expected to enact legislation in the next few years.

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The Company uses derivative financial instruments, primarily foreign currency forward exchange contracts, for the purposes of managing foreign currency exchange rate risk on expected future cash flows.

As of December 31, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $ 541 million and the purchase of $ 327 million of foreign currencies at fixed rates.

As of March 31, 2026, the Company had outstanding foreign currency forward exchange contracts for the sale of $ 591 million and the purchase of $ 327 million of foreign currencies at fixed rates.

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

The Company recorded no realized pre-tax gains and unrealized pre-tax losses of $ 1 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the three months ended December 31, 2025.

The Company recorded realized pre-tax gains of $ 3 million and unrealized pre-tax gains of $ 12 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the three months ended December 31, 2024.

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

The Company recorded realized pre-tax losses of $ 2 million and unrealized pre-tax gains of $ 2 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the six months ended March 31, 2026.

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

The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at March 31, 2026 and September 30, 2025:

2026 September 30,

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______________________________________

(a) For December 31, 2025 includes $ 6 million and $ 7 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $ 0 million of current assets and $ 1 million of current liabilities, respectively.

(a) For March 31, 2026 includes $ 13 million and $ 12 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $ 3 million of current assets and $ 2 million of current liabilities, respectively.

For September 30, 2025 includes $ 3 million and $ 6 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $ 0 million of current assets and $ 3 million of current liabilities, respectively.

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Three Months Ended (in millions)

December 31, 2025

March 31, 2026

Revenues $ 1,380 $ 353 $ ( 1 ) $ 1,732

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Net loss on divestitures

— — ( 5 ) ( 5 )

Operating income (loss) $ 288 $ 61 $ ( 85 ) $ 264

Loss on extinguishment of debt 7

Interest expense, net

Other expense, net

Income before income taxes

Depreciation expense (a) 10 — 21 31

December 31, 2024

March 31, 2025

Revenues $ 1,175 $ 310 $ ( 1 ) $ 1,484

6 unchanged sentences

Operating income (loss) $ 203 $ 52 $ ( 87 ) $ 168

Interest expense, net 39

Other expense, net 64

Income before income taxes 65

Depreciation expense (a) 13 2 13 28

Publishing Corporate

eliminations Total

Six Months Ended (in millions)

March 31, 2026

Revenues $ 2,860 $ 715 $ ( 3 ) $ 3,572

Cost of revenue 1,467 452 ( 2 ) 1,917

Selling and marketing expense 309 2 11 322

Distribution expense 61 — — 61

General and administrative expense 307 66 162 535

Restructuring & Impairment 28 — 12 40

Amortization expense 71 69 — 140

Net loss on divestitures

Operating income (loss) $ 617 $ 126 $ ( 191 ) $ 552

Loss on extinguishment of debt 7

Interest expense, net

Other expense, net

Income before income taxes

Depreciation expense (a) 22 1 39 62

March 31, 2025

Revenues $ 2,520 $ 633 $ ( 3 ) $ 3,150

Cost of revenue 1,285 404 ( 4 ) 1,685

Selling and marketing expense 300 2 13 315

Distribution expense 49 — — 49

General and administrative expense 341 65 154 560

Restructuring & Impairment 41 — ( 1 ) 40

Amortization expense 63 55 1 119

Operating income (loss) $ 441 $ 107 $ ( 166 ) $ 382

Interest expense, net

Other expense, net

Income before income taxes

Depreciation expense (a) 28 3 26 57

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

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Supplemental Cash Flow Disclosures

The Company made interest payments of approximately $ 38 million and $ 18 million during the three months ended December 31, 2025 and 2024, respectively.

The Company paid approximately $ 68 million and $ 43 million of income and withholding taxes, net of refunds, for the three months ended December 31, 2025 and 2024, respectively.

Non-cash investing activities were approximately $ 8 million related to the receipt of noncash consideration and the acquisition of music publishing rights and music catalogs during the three months ended December 31, 2025 and $ 18 million related to business combinations and the acquisition of music publishing rights and music catalogs during the three months ended December 31, 2024.

The Company made interest payments of approximately $ 54 million and $ 53 million during the three months ended March 31, 2026 and 2025, respectively, and approximately $ 92 million and $ 71 million during the six months ended March 31, 2026 and 2025, respectively.

The Company paid approximately $ 58 million of income and withholding taxes, net of refunds, for each of the three months ended March 31, 2026 and 2025, and approximately $ 126 million and $ 101 million of income and withholding taxes, net of refunds, for the six months ended March 31, 2026 and 2025, respectively.

Non-cash investing activities were approximately $ 73 million and are primarily related to the acquisition of music publishing rights and music catalogs and the receipt of noncash consideration during the six months ended March 31, 2026 and $ 34 million related to business combinations and the acquisition of music catalogs during the six months ended March 31, 2025.

Assets and Liabilities Held for Sale

In the fourth quarter of fiscal year 2025, the Company signed a non-binding letter of intent to sell its EMP business within our Recorded Music segment and was classified as held for sale.

The sale is expected to be completed in the second quarter of fiscal year 2026.

The sale is expected to be completed by the end of the current fiscal year.

Upon classification as held for sale, the business was measured at the lower of its carrying amount or its estimated fair value less costs to sell.

For the three months ended December 31, 2025, the Company recognized an impairment charge of $ 9 million within the Recorded Music segment for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

For the three and six months ended March 31, 2026, the Company recognized an impairment charge of $ 2 million and $ 11 million, respectively, within the Recorded Music segment for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

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

The major classes of assets and liabilities of the business held for sale as of December 31, 2025 are as follows:

December 31, 2025 September 30, 2025

The major classes of assets and liabilities of the business held for sale as of March 31, 2026 are as follows:

March 31, 2026 September 30, 2025

(in millions) (in millions)

Cash $ 16 $ 3

Inventories 40 50

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Net Gain (Loss) on Divestitures

The Company recognized a pre-tax loss of $ 5 million during the three months ended December 31, 2025, in connection with the divestiture of certain assets which have been reflected as a net loss (gain) on divestiture in the accompanying condensed consolidated statement of operations.

The Company recognized a pre-tax loss of $ 5 million during the six months ended March 31, 2026 in connection with the divestiture of certain assets which have been reflected as a net loss (gain) on divestiture in the accompanying condensed consolidated statement of operations.

Net Gain on Sale of Investments

The Company recognized a pre-tax realized net gain of $ 29 million during the three months ended December 31, 2024 in connection with the sale of an investment that has been presented within the Other income (expense) line of the accompanying condensed consolidated statement of operations.

The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50 :1.00 and the term loans do not achieve an investment grade rating.

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

The Company has been paying quarterly cash dividends to holders of its Class A Common Stock and Class B Common Stock.

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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 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 Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on December 2, 2025.

The Company paid an aggregate of approximately $ 100 million, or $ 0.19 per share, in cash dividends to stockholders and participating security holders for the three months ended December 31, 2025.

On February 5, 2026, the Company’s board of directors declared a cash dividend of $ 0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on March 3, 2026 to stockholders of record as of the close of business on February 18, 2026.

The Company paid an aggregate of approximately $ 100 million and $ 200 million, or $ 0.19 and $ 0.38 per share, in cash dividends to stockholders and participating security holders for the three and six months ended March 31, 2026, respectively.

On May 7, 2026, the Company’s board of directors declared a cash dividend of $ 0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on June 2, 2026, to stockholders of record as of the close of business on May 26, 2026.

Fair Value Measurements

The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of December 31, 2025 and September 30, 2025.

Fair Value Measurements as of December 31, 2025

The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of March 31, 2026 and September 30, 2025.

Fair Value Measurements as of March 31, 2026

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

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

The Company did not record any impairment charges on these investments during the three months ended December 31, 2025 and recorded approximately $ 1 million of impairment charges on these investments during the three months ended December 31, 2024.

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

The Company did not record any impairment charges on these investments during the three and six months ended March 31, 2026 and recorded approximately $ 2 million and $ 3 million of impairment charges on these investments during the three and six months ended March 31, 2025, respectively.

In addition, there were no observable price changes events that were completed during the three and six months ended March 31, 2026 and 2025.

Fair Value of Debt

Based on the level of interest rates prevailing at December 31, 2025, the fair value of the Company’s debt was $ 4.290 billion.

Based on the level of interest rates prevailing at March 31, 2026, the fair value of the Company’s debt was $ 4.574 billion.

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

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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-Q

Item 1. Financial Statements