What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-07 · 303 added, 287 removed, 656 unchanged (47% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our results of operations and financial condition with the unaudited interim financial statements included elsewhere in this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026 (the “Quarterly Report”).

“SAFE HARBOR” STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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• Results of operations.

This section provides an analysis of our results of operations for the three and six months ended March 31, 2026 and March 31, 2025.

This section provides an analysis of our results of operations for the three and nine months ended June 30, 2026 and June 30, 2025.

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

• Financial condition and liquidity.

This section provides an analysis of our cash flows for the six months ended March 31, 2026 and March 31, 2025, as well as a discussion of our financial condition and liquidity as of March 31, 2026.

This section provides an analysis of our cash flows for the nine months ended June 30, 2026 and June 30, 2025, as well as a discussion of our financial condition and liquidity as of June 30, 2026.

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

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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.

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

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

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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 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.

For the three months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $4 million, of which $3 million of expense was recognized in our Recorded Music segment and $1 million was recognized in Corporate.

For the nine months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $34 million, of which $21 million of expense was recognized in our Recorded Music segment and $13 million was recognized in Corporate.

As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2025 Restructuring Plan were $152 million with $100 million of costs recognized in our Recorded Music segment, $5 million of costs recognized in our Music Publishing segment, and $47 million recognized in Corporate.

These costs are composed of $124 million of severance costs and $28 million of non-cash impairment charges primarily related to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets.

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

2024 Strategic Restructuring Plan

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

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

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.

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

As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $215 million with $206 million of costs recognized in our Recorded Music segment and $9 million recognized in Corporate.

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

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

There was a $1 million benefit recognized for the nine months ended June 30, 2026 related to the 2024 Strategic Restructuring Plan.

Other Impairments

For the three and 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.

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

For the three and nine months ended June 30, 2025, prior to its classification as held for sale, the Company recognized an impairment charge of $70 million within the Recorded Music segment for long-lived assets associated with EMP.

BMG Termination

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025

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

Consolidated Results

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For the Three Months Ended

March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

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Total Revenues

Total revenues increased by $248 million, or 17%, to $1,732 million for the three months ended March 31, 2026 from $1,484 million for the three months ended March 31, 2025.

Revenue growth was impacted by a digital revenue settlement of $11 million in the prior-year quarter (the “DSP True-Up and Settlement Payments”).

Total revenues increased by $175 million, or 10%, to $1,864 million for the three months ended June 30, 2026 from $1,689 million for the three months ended June 30, 2025.

Revenue growth was impacted by digital revenue from the settlement of certain copyright infringement cases of $16 million in the prior-year quarter (the “Copyright Settlement”).

Recorded Music revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $10 million less Recorded Music digital revenue compared to the prior-year quarter.

Adjusted for these items, total revenues increased by $201 million, or 12%, which includes $16 million of favorable currency exchange fluctuations.

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenue for the three months ended March 31, 2026, respectively, and 79% and 21% of total revenue for the three months ended March 31, 2025, respectively.

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenue for each of the three months ended June 30, 2026 and June 30, 2025.

Prior to intersegment eliminations, U.S.

and international revenues represented 43% and 57% of total revenues for the three months ended March 31, 2026 and 44% and 56% of total revenues for the three months ended March 31, 2025.

Total digital revenues after intersegment eliminations increased by $172 million, or 17%, to $1,199 million for the three months ended March 31, 2026 from $1,027 million for the three months ended March 31, 2025.

and international revenues represented 42% and 58% of total revenues for the three months ended June 30, 2026 and 43% and 57% of total revenues for the three months ended June 30, 2025.

Total digital revenues after intersegment eliminations increased by $119 million, or 11%, to $1,251 million for the three months ended June 30, 2026 from $1,132 million for the three months ended June 30, 2025.

Total streaming revenue increased by $135 million, driven by growth in Recorded Music and Music Publishing.

Total streaming revenue includes $15 million of favorable currency exchange fluctuations.

Prior to intersegment eliminations, total digital revenues for the three months ended March 31, 2026 were composed of U.S.

Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2026 were composed of U.S.

revenues of $556 million and international revenues of $695 million, or 44% and 56% of total digital revenues, respectively.

Prior to intersegment eliminations, total digital revenues for the three months ended March 31, 2025 were composed of U.S.

Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2025 were composed of U.S.

revenues of $535 million and international revenues of $598 million, or 47% and 53% of total digital revenues, respectively.

Recorded Music revenues increased by $205 million, or 17%, to $1,380 million for the three months ended March 31, 2026 from $1,175 million for the three months ended March 31, 2025.

Recorded Music revenues increased by $134 million, or 10%, to $1,488 million for the three months ended June 30, 2026 from $1,354 million for the three months ended June 30, 2025.

The increase includes $13 million of favorable currency exchange fluctuations.

Recorded Music revenues were $565 million and $497 million, or 41% and 42% of consolidated Recorded Music revenues for each of the three months ended March 31, 2026 and March 31, 2025, respectively.

International Recorded Music revenues were $815 million and $678 million, or 59% and 58%, of consolidated Recorded Music revenues for each of the three months ended March 31, 2026 and March 31, 2025, respectively.

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.

Recorded Music revenues were $587 million and $536 million, or 39% and 40% of consolidated Recorded Music revenues for each of the three months ended June 30, 2026 and June 30, 2025, respectively.

International Recorded Music revenues were $901 million and $818 million, or 61% and 60%, of consolidated Recorded Music revenues for each of the three months ended June 30, 2026 and June 30, 2025, respectively.

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

Digital revenue increased by $87 million, or 9%, which includes a favorable impact of currency exchange fluctuations of $14 million, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription and ad-supported revenues.

Revenue from streaming services increased by $136 million, or 16%, to $961 million for the three months ended March 31, 2026 from $825 million for the three months ended March 31, 2025.

Adjusted for the impacts of the DSP True-Up and Settlement Payments and the BMG Termination in the prior-year quarter, Recorded Music streaming revenue increased $153 million, or 19%, to $961 million for the three months ended March 31, 2026 from $808 million for the three months ended March 31, 2025.

Download and other digital revenues decreased by $2 million, or 13%, to $14 million for the three months ended March 31, 2026 from $16 million for the three months ended March 31, 2025.

Artist services and expanded-rights revenue increased by $47 million, or 40%, due to higher concert promotion revenue primarily in France, higher merchandising revenue, and a favorable impact of foreign currency exchange rates of $6 million.

Physical revenue increased by $25 million, or 22%, primarily driven by strong releases in the quarter as well as catalog and carryover success, and a favorable impact of foreign currency exchange rates of $4 million.

Licensing revenue decreased by $1 million, or 1%.

Top sellers in the quarter included Bruno Mars, Alex Warren, sombr, Ed Sheeran and Melanie Martinez.

Music Publishing revenues increased by $43 million, or 14%, to $353 million for the three months ended March 31, 2026 from $310 million for the three months ended March 31, 2025.

Music Publishing revenues were $178 million and $161 million, or 50% and 52% of consolidated Music Publishing revenues, for the three months ended March 31, 2026 and March 31, 2025, respectively.

International Music Publishing revenues were $175 million and $149 million, or 50% and 48% of consolidated Music Publishing revenues, for the three months ended March 31, 2026 and March 31, 2025, respectively.

The overall increase in Music Publishing revenue was driven by increases in digital, performance, synchronization, and mechanical revenues.

Adjusted for the impacts of the Copyright Settlement and BMG Termination in the prior-year quarter, digital revenue increased $113 million, or 13%.

Revenue from streaming services increased by $106 million, or 12%, to $1,001 million for the three months ended June 30, 2026 from $895 million for the three months ended June 30, 2025.

Adjusted for the impact of the BMG Termination in the prior-year quarter, Recorded Music streaming revenue increased $116 million, or 13%.

Download and other digital revenues decreased by $19 million, or 56%, to $15 million for the three months ended June 30, 2026 from $34 million for the three months ended June 30, 2025, primarily due to the $16 million impact of the Copyright Settlement in the prior-year quarter.

Artist services and expanded-rights revenue increased by $29 million, or 15%, due to higher concert promotion revenue primarily in Japan and higher merchandising revenue.

Physical revenue increased by $18 million, or 15%, primarily driven by strong releases in the quarter as well as catalog and carryover success, partially offset by an unfavorable impact of foreign currency exchange rates of $2 million.

Licensing revenue remained constant for each of the three months ended June 30, 2026 and June 30, 2025.

Top sellers in the quarter included Bruno Mars, Don Toliver, sombr, Alex Warren and Madonna.

Music Publishing revenues increased by $41 million, or 12%, to $377 million for the three months ended June 30, 2026 from $336 million for the three months ended June 30, 2025.

Music Publishing revenues were $194 million and $186 million, or 51% and 55% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

International Music Publishing revenues were $183 million and $150 million, or 49% and 45% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Music Publishing revenue was driven by increases in digital, synchronization, mechanical, and performance revenues.

Digital revenue increased by $31 million, or 15%, driven by an increase in streaming revenue.

Revenue from streaming services grew by $37 million, or 20%, to $222 million for the three months ended March 31, 2026 from $185 million for the three months ended March 31, 2025, driven by the impact of new deals and renewals, continued market growth and a favorable impact of foreign currency exchange rates of $6 million.

Performance revenue increased by $5 million, or 9%, driven by growth from touring and live events primarily in Europe, and a favorable impact of foreign currency exchange rates of $3 million.

Synchronization revenue increased by $1 million, or 2%, attributable to a favorable impact of foreign currency exchange rates of $2 million.

Revenue from streaming services grew by $29 million, or 14%, to $231 million for the three months ended June 30, 2026 from $202 million for the three months ended June 30, 2025, driven by continued market growth and the impact of new deals and renewals.

Synchronization revenue increased by $6 million, or 11%, attributable to an increase in other copyright infringement settlements of approximately $6 million, and a favorable impact of foreign currency exchange rates of $2 million.

Mechanical revenue increased by $3 million, or 19%, driven by the timing of distributions.

Performance revenue increased by $1 million, or 2%, which includes a favorable impact of foreign currency exchange rates of $2 million.

Revenue by Geographical Location

revenue increased by $85 million, or 13%, to $743 million for the three months ended March 31, 2026 from $658 million for the three months ended March 31, 2025.

revenue increased by $59 million, or 8%, to $781 million for the three months ended June 30, 2026 from $722 million for the three months ended June 30, 2025.

Recorded Music revenue increased by $51 million, or 10%.

Recorded Music digital revenue increased by $29 million, or 8%, driven by higher streaming revenue of $31 million, or 8%, including the impact of the BMG Termination in the prior-year quarter.

Recorded Music licensing revenue increased by $2 million, or 5%, driven by higher copyright infringement settlements.

Recorded Music digital revenue increased by $14 million, or 3%, driven by higher streaming revenue of $31 million, or 8%, partially offset by the impacts of the Copyright Settlement of $16 million and the BMG Termination of $7 million in the prior-year quarter.

Recorded Music licensing revenue increased by $9 million, or 26%, driven by higher copyright infringement settlements of $5 million.

Recorded Music physical revenue increased $21 million, or 45%, driven by strong releases in the quarter as well as catalog and carryover success.

Recorded Music artist services and expanded-rights revenues increased by $14 million, or 61%, driven by higher merchandising revenue.

Music Publishing revenue increased by $17 million, or 11%, to $178 million for the three months ended March 31, 2026 from $161 million for the three months ended March 31, 2025.

Recorded Music artist services and expanded-rights revenues increased by $7 million, or 16%, driven by higher merchandising revenue of approximately $12 million.

Music Publishing revenue increased by $8 million, or 4%, to $194 million for the three months ended June 30, 2026 from $186 million for the three months ended June 30, 2025.

Music Publishing digital revenue increased by $7 million, or 6%, attributable to higher streaming revenue of $7 million, or 6%.

Music Publishing synchronization revenue increased by $3 million, or 10%, driven by timing of certain copyright infringement settlements and the impact of acquisitions.

Music Publishing performance decreased by $3 million, or 16%, and mechanical revenue decreased by $1 million driven by the timing of distributions.

International revenue increased by $163 million, or 20%, to $990 million for the three months ended March 31, 2026 from $827 million for the three months ended March 31, 2025.

Music Publishing synchronization revenue increased by $3 million, or 8%, driven by timing of certain copyright infringement settlements.

Music Publishing performance decreased by $2 million, or 10%, and mechanical revenue increased by $1 million, or 33%.

International revenue increased by $116 million, or 12%, to $1,084 million for the three months ended June 30, 2026 from $968 million for the three months ended June 30, 2025.

Excluding the favorable impact of foreign currency exchange rates of $17 million, international revenue increased by $99 million, or 10%.

International Recorded Music revenue increased by $137 million, which includes a favorable impact of foreign currency exchange rates of $50 million, driven by growth across digital, artist services and expanded rights and physical revenues, partially offset by a decrease in licensing revenue.

International Recorded Music digital revenue increased by $105 million, attributable to higher streaming revenue of $105 million, or 23%, which includes the impacts of the DSP True-Up and Settlement Payments and the BMG Termination in the prior-year quarter, and a favorable impact of foreign currency exchange rates of $32 million.

International Recorded Music artist services and expanded-rights revenue increased by $33 million, or 35%, driven by higher concert promotion revenue primarily in France, and the favorable impact of foreign currency exchange rates of $6 million.

International Recorded Music physical revenue increased by $2 million driven by the favorable impact of foreign currency exchange rates of $4 million.

These increases were partially offset by a decrease in licensing revenue of $3 million, or 4%.

International Music Publishing revenue increased by $26 million, or 17%, to $175 million for the three months ended March 31, 2026 from $149 million for the three months ended March 31, 2025.

International Music Publishing revenue growth was driven by increases in digital revenue of $18 million due to growth in streaming, performance revenue of $8 million due to growth from concerts and live events primarily in Europe, and mechanical revenue of $2 million driven by the timing of distributions.

Synchronization revenue decreased by $2 million, or 10%.

International Recorded Music revenue increased by $83 million, which includes a favorable impact of foreign currency exchange rates of $13 million, driven by growth across digital and artist services and expanded rights, partially offset by decreases in licensing and physical revenues.

International Recorded Music digital revenue increased by $73 million, attributable to higher streaming revenue of $75 million, or 15%, and a favorable impact of foreign currency exchange rates of $14 million, partially offset by the impact of the BMG Termination of $3 million in the prior-year quarter.

International Recorded Music artist services and expanded-rights revenue increased by $22 million, or 14%, driven by higher concert promotion revenue primarily in Japan.

These increases were partially offset by a decrease in licensing revenue of $9 million, or 12%, and a decrease in physical revenue of $3 million driven by the unfavorable impact of foreign currency exchange rates of $2 million.

International Music Publishing revenue increased by $33 million, or 22%, to $183 million for the three months ended June 30, 2026 from $150 million for the three months ended June 30, 2025.

International Music Publishing revenue growth was driven by increases in digital revenue of $24 million due to growth in streaming of $22 million, mechanical revenue of $2 million driven by the timing of distributions, performance revenue of $3 million, or 8%, and synchronization revenue of $3 million, or 18%.

Cost of revenues

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For the Three Months Ended

March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

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Total cost of revenues $ 1,010 $ 913 $ 97 11 %

Artist and repertoire costs increased by $86 million, to $617 million for the three months ended March 31, 2026 from $531 million for the three months ended March 31, 2025.

Artist and repertoire costs as a percentage of revenue remained constant at 36% for each of the three months ended March 31, 2026 and March 31, 2025.

Product costs increased by $53 million, to $313 million for the three months ended March 31, 2026 from $260 million for the three months ended March 31, 2025.

Product costs as a percentage of revenue remained constant at 18% for each of the three months ended March 31, 2026 and March 31, 2025.

Artist and repertoire costs increased by $69 million, to $653 million for the three months ended June 30, 2026 from $584 million for the three months ended June 30, 2025.

Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the three months ended June 30, 2026 and June 30, 2025.

Product costs increased by $28 million, to $357 million for the three months ended June 30, 2026 from $329 million for the three months ended June 30, 2025.

Product costs as a percentage of revenue remained constant at 19% for each of the three months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expenses

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For the Three Months Ended

March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

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______________________________________

(1) Includes depreciation expense of $31 million and $28 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Total selling, general and administrative expense increased by $10 million, to $460 million for the three months ended March 31, 2026 from $450 million for the three months ended March 31, 2025, primarily driven by unfavorable movements in foreign currency exchange rates of $12 million.

Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 27% for the three months ended March 31, 2026 from 30% for the three months ended March 31, 2025 due to the factors noted below.

General and administrative expense decreased by $13 million to $263 million for the three months ended March 31, 2026 from $276 million for the three months ended March 31, 2025.

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

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

Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 25% for the three months ended June 30, 2026 from 28% for the three months ended June 30, 2025 due to the factors noted below.

General and administrative expense decreased by $18 million to $264 million for the three months ended June 30, 2026 from $282 million for the three months ended June 30, 2025.

The decrease in general and administrative expense was primarily driven by cost savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher depreciation expense of $4 million due to the core financials component of our new technology platform being placed into service.

Expressed as a percentage of revenue, general and administrative expense decreased to 15% for the three months ended March 31, 2026 compared to 19% for the three months ended March 31, 2025.

Selling and marketing expense increased by $10 million, or 6%, to $167 million for the three months ended March 31, 2026 from $157 million for the three months ended March 31, 2025.

Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the three months ended March 31, 2026 from 11% for the three months ended March 31, 2025 due to savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.

Distribution expense increased by $13 million to $30 million for the three months ended March 31, 2026 from $17 million for the three months ended March 31, 2025.

Expressed as a percentage of revenue, distribution expense increased to 2% for the three months ended March 31, 2026 compared to 1% for the three months ended March 31, 2025, driven by higher physical and merchandising revenues.

Expressed as a percentage of revenue, general and administrative expense decreased to 14% for the three months ended June 30, 2026 compared to 17% for the three months ended June 30, 2025.

Selling and marketing expense decreased by $3 million, or 2%, to $164 million for the three months ended June 30, 2026 from $167 million for the three months ended June 30, 2025.

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

Distribution expense increased by $14 million to $36 million for the three months ended June 30, 2026 from $22 million for the three months ended June 30, 2025.

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

Reconciliation of Net Income Attributable to Warner Music Group Corp.

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For the Three Months Ended

March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

Net income attributable to Warner Music Group Corp.

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

$ 204 $ (16) $ 220 — %

Income attributable to noncontrolling interest (4) — (4) — %

Net income 181 36 145 — %

Net income (loss) 200 (16) 216 — %

Income tax expense 67 5 62 — %

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Interest expense, net 49 43 6 14 %

Loss on extinguishment of debt 7 — 7 — %

Operating income 305 169 136 80 %

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Transformation initiative costs 10 19 (9) (47) %

Executive transition costs — 4 (4) — %

Non-cash stock-based compensation and other related costs — 16 (16) (100) %

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Adjusted OIBDA

Adjusted OIBDA increased by $94 million to $397 million for the three months ended March 31, 2026 from $303 million for the three months ended March 31, 2025, driven by the impact of the DSP True-Up and Settlement Payments of $7 million and the BMG Termination of $1 million in the prior-year quarter, as well as revenue mix and savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of approximately $13 million.

Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 23% for the three months ended March 31, 2026 from 20% for the three months ended March 31, 2025.

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

Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 23% for the three months ended June 30, 2026 from 22% for the three months ended June 30, 2025.

Non-cash stock-based compensation and other related costs

Our non-cash stock-based compensation and other related costs decreased by $2 million to $12 million for the three months ended March 31, 2026 from $14 million for the three months ended March 31, 2025.

There were no non-cash stock-based compensation and other related costs for the three months ended June 30, 2026 primarily due to the favorable impact of forfeitures.

Non-cash stock-based compensation and other related costs were $16 million for the three months ended June 30, 2025 which included $5 million of costs related to the departure of our former CFO.

Executive transition costs

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

Executive transition costs were $4 million during the three months ended June 30, 2025, which consisted of severance costs associated with the departure of our former CFO during fiscal 2025.

Transformation initiative costs

Our transformation initiative costs, which include costs associated with our finance transformation, decreased by $6 million to $12 million for the three months ended March 31, 2026 from $18 million for the three months ended March 31, 2025.

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

Restructuring and Impairments

Our restructuring and impairment charges decreased to $6 million for the three months ended March 31, 2026 from $13 million for the three months ended March 31, 2025.

The three months ended March 31, 2026 includes an impairment charge of $2 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

Our restructuring and impairment charges decreased to $7 million for the three months ended June 30, 2026 from $69 million for the three months ended June 30, 2025.

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

The three months ended June 30, 2025 includes the initial impairment charge of $70 million for long-lived assets associated with EMP.

Depreciation expense

Our depreciation expense increased by $3 million to $31 million for the three months ended March 31, 2026 from $28 million for the three months ended March 31, 2025.

Our depreciation expense increased by $4 million to $33 million for the three months ended June 30, 2026 from $29 million for the three months ended June 30, 2025.

The increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.

Amortization expense

Our amortization expense increased by $10 million, to $72 million for the three months ended March 31, 2026 from $62 million for the three months ended March 31, 2025.

The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by EMP intangible assets, which have been classified as held for sale.

Our amortization expense increased by $11 million, to $78 million for the three months ended June 30, 2026 from $67 million for the three months ended June 30, 2025.

The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by a decrease of approximately $1 million from the classification of EMP intangible assets as held for sale.

Operating income

Our operating income increased by $96 million to $264 million for the three months ended March 31, 2026 from $168 million for the three months ended March 31, 2025, primarily due to the factors impacting Adjusted OIBDA described above and a decrease in restructuring and impairment charges of $7 million.

The increase in operating income was partially offset by higher amortization expenses of $10 million for the three months ended March 31, 2026.

Loss on extinguishment of debt

We recorded a loss on extinguishment of debt in the amount of $7 million for the three months ended March 31, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs in connection with the refinancing of our Tranche B Term Loans.

There was no loss on extinguishment of debt for the three months ended March 31, 2025.

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

The increase in operating income was partially offset by higher amortization expenses of $11 million for the three months ended June 30, 2026.

Interest expense, net

Our interest expense, net, increased to $41 million for the three months ended March 31, 2026 from $39 million for the three months ended March 31, 2025 due to incremental debt related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo Music in the prior year as well as incremental debt related to the Beethoven Credit Agreement in the quarter, partially offset by lower interest rates on variable rate debt in the quarter.

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

Other (income) expense

Other income for the three months ended March 31, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $22 million and a currency exchange gain on intercompany loans of $12 million.

This compares to foreign currency losses on our Euro-denominated debt of $34 million, currency exchange losses on our intercompany loans of $27 million, and realized and unrealized losses on hedging activity of $6 million for the three months ended March 31, 2025.

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

This compares to foreign currency losses on our Euro-denominated debt of $70 million, currency exchange losses on our intercompany loans of $63 million, and realized and unrealized losses on hedging activity of $8 million for the three months ended June 30, 2025.

Income tax expense

Our income tax expense increased by $44 million to $73 million for the three months ended March 31, 2026 from $29 million for the three months ended March 31, 2025.

The increase of $44 million in income tax expense is primarily due to an increase in pre-tax income in the quarter and a taxable gain on the Company’s sale of certain recorded music catalog rights to Beethoven JV, partially offset by the tax benefit associated with partial release of valuation allowance on EMP.

Net income increased by $145 million to $181 million for the three months ended March 31, 2026 from $36 million for the three months ended March 31, 2025 as a result of the factors described above.

Our income tax expense increased by $62 million to $67 million for the three months ended June 30, 2026 from $5 million for the three months ended June 30, 2025.

The increase of $62 million in income tax expense is primarily due to an increase in pre-tax income in the quarter and a $20 million smaller benefit from EMP impairment in the current year quarter.

Net income (loss)

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

Noncontrolling interest

There was income attributable to noncontrolling interest of $2 million during the three months ended March 31, 2026.

There was no loss or income attributable to noncontrolling interest for the three months ended March 31, 2025.

There was income attributable to noncontrolling interest of $4 million during the three months ended June 30, 2026.

There was no loss or income attributable to noncontrolling interest for the three months ended June 30, 2025.

Business Segment Results

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For the Three Months Ended

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June 30, 2026 vs.

2026 2025 $ Change % Change

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Depreciation and amortization expense 21 14 7 50 %

Restructuring and impairments 1 — 1 — %

Transformation initiatives and other related costs 10 19 (9) -47 %

Executive transition costs — 4 (4) -100 %

Non-cash stock-based compensation and other related costs 7 11 (4) -36 %

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Recorded Music

Recorded Music revenue increased by $205 million, or 17%, to $1,380 million for the three months ended March 31, 2026 from $1,175 million for the three months ended March 31, 2025.

Recorded Music revenues were $565 million and $497 million, or 41% and 42% of consolidated Recorded Music revenues, for the three months ended March 31, 2026 and March 31, 2025, respectively.

International Recorded Music revenues were $815 million and $678 million, or 59% and 58% of consolidated Recorded Music revenues, for the three months ended March 31, 2026 and March 31, 2025, respectively.

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

Recorded Music revenue increased by $134 million, or 10%, to $1,488 million for the three months ended June 30, 2026 from $1,354 million for the three months ended June 30, 2025.

Recorded Music revenues were $587 million and $536 million, or 39% and 40% of consolidated Recorded Music revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

International Recorded Music revenues were $901 million and $818 million, or 61% and 60% of consolidated Recorded Music revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

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

Cost of revenues

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June 30, 2026 vs.

2026 2025 $ Change % Change

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Total cost of revenues $ 777 $ 706 $ 71 10 %

Recorded Music cost of revenues increased by $108 million, to $707 million for the three months ended March 31, 2026 from $599 million for the three months ended March 31, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 29% for each of the three months ended March 31, 2026 and March 31, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music product costs increased to 23% for the three months ended March 31, 2026 from 22% for the three months ended March 31, 2025, driven by revenue and deal mix.

Recorded Music cost of revenues increased by $71 million, to $777 million for the three months ended June 30, 2026 from $706 million for the three months ended June 30, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the three months ended June 30, 2026 and June 30, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 24% for each of the three months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

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______________________________________

(1) Includes depreciation expense of $10 million and $13 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Recorded Music selling, general and administrative expense increased by $15 million, to $342 million for the three months ended March 31, 2026 from $327 million for the three months ended March 31, 2025, primarily driven by unfavorable movements in foreign currency exchange rates of $12 million.

The decrease in general and administrative expense was largely driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business.

The increase in selling and marketing expense was driven by higher variable marketing spend for key releases.

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

Recorded Music selling, general and administrative expense decreased by $9 million, to $336 million for the three months ended June 30, 2026 from $345 million for the three months ended June 30, 2025,which includes unfavorable movements in foreign currency exchange rates of $2 million.

The decreases in general and administrative expense and selling and marketing expense were largely driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business.

The decrease in selling and marketing expense was partially offset by higher variable marketing spend for key releases.

The increase in distribution expense was primarily driven by revenue mix from higher merchandising and physical revenues.

Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 25% for the three months ended March 31, 2026 from 28% for the three months ended March 31, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 23% for the three months ended June 30, 2026 from 25% for the three months ended June 30, 2025.

Operating Income and Adjusted OIBDA

Recorded Music operating income increased by $85 million to $288 million for the three months ended March 31, 2026 from $203 million for the three months ended March 31, 2025.

Recorded Music operating income increased by $125 million to $326 million for the three months ended June 30, 2026 from $201 million for the three months ended June 30, 2025.

In addition to the factors impacting Adjusted OIBDA described below, the increase in operating income was driven by decreases in restructuring and impairment charges of $63 million and depreciation expense of $4 million compared to the prior-year quarter, partially offset by higher amortization expenses of $10 million related to acquisitions of music-related assets.

Recorded Music Adjusted OIBDA increased by $76 million to $346 million for the three months ended March 31, 2026 from $270 million for the three months ended March 31, 2025, largely driven by savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by the impact of the DSP True-Up and Settlement Payments of $7 million and the BMG Termination of $1 million in the prior-year quarter, as well as unfavorable movements in foreign currency exchange rates of approximately $9 million.

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 25% for the three months ended March 31, 2026 from 23% for the three months ended March 31, 2025 due to the factors noted above.

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

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 25% for the three months ended June 30, 2026 from 24% for the three months ended June 30, 2025 due to the factors noted above.

Music Publishing

Music Publishing revenues increased by $43 million, or 14%, to $353 million for the three months ended March 31, 2026 from $310 million for the three months ended March 31, 2025.

Music Publishing revenues were $178 million and $161 million, or 50% and 52% of consolidated Music Publishing revenues, for the three months ended March 31, 2026 and March 31, 2025, respectively.

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

Music Publishing revenues increased by $41 million, or 12%, to $377 million for the three months ended June 30, 2026 from $336 million for the three months ended June 30, 2025.

Music Publishing revenues were $194 million and $186 million, or 51% and 55% of consolidated Music Publishing revenues, for the three months ended June 30, 2026 and June 30, 2025, respectively.

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

Cost of revenues

1 unchanged sentence

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March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

1 unchanged sentence

Total cost of revenues $ 235 $ 208 $ 27 13 %

Music Publishing cost of revenues increased by $30 million, or 16%, to $224 million for the three months ended March 31, 2026 from $194 million for the three months ended March 31, 2025.

Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the three months ended March 31, 2026 and March 31, 2025.

Music Publishing cost of revenues increased by $27 million, or 13%, to $235 million for the three months ended June 30, 2026 from $208 million for the three months ended June 30, 2025.

Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 62% for each of the three months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

1 unchanged sentence

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March 31, 2026 vs.

June 30, 2026 vs.

2026 2025 $ Change % Change

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______________________________________

(1) Includes depreciation expense of $2 million for the three months ended March 31, 2025.

There was no depreciation expense for the three months ended March 31, 2026.

Music Publishing selling, general and administrative expense decreased by $2 million, or 6%, to $33 million for the three months ended March 31, 2026 from $35 million for the three months ended March 31, 2025, primarily due to cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business.

Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense decreased to 9% for the three months ended March 31, 2026 from 11% for the three months ended March 31, 2025.

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

Music Publishing selling, general and administrative expense increased by $2 million, or 6%, to $36 million for the three months ended June 30, 2026 from $34 million for the three months ended June 30, 2025.

Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for each of the three months ended June 30, 2026 and June 30, 2025.

Operating Income and Adjusted OIBDA

Music Publishing operating income increased by $9 million to $61 million for the three months ended March 31, 2026 from $52 million for the three months ended March 31, 2025.

The increase is driven by the same factors affecting Adjusted OIBDA discussed below, as well as lower depreciation expenses of $2 million, partially offset by an increase in amortization expense of $6 million related to the impact of acquisitions.

Music Publishing Adjusted OIBDA increased by $12 million, or 14%, to $97 million for the three months ended March 31, 2026 from $85 million for the three months ended March 31, 2025, primarily driven by revenue growth and strong operating performance, as well as savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by unfavorable movements in foreign exchange rates of approximately $4 million.

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 27% for each of the three months ended March 31, 2026 and March 31, 2025.

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

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

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 29% for each of the three months ended June 30, 2026 and June 30, 2025.

Corporate Expenses and Eliminations

Our operating loss from corporate expenses and eliminations decreased by $2 million for the three months ended March 31, 2026 to $85 million from $87 million for the three months ended March 31, 2025, driven by savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher depreciation expense of $8 million driven by the core financials and global revenue solution components of our new technology platform being placed into service, and higher non-cash stock-based compensation and other related expenses of $2 million.

Our Adjusted OIBDA loss from corporate expenses and eliminations decreased by $6 million to $46 million for the three months ended March 31, 2026 from $52 million for the three months ended March 31, 2025, primarily due to savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business.

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

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

RESULTS OF OPERATIONS

Six Months Ended March 31, 2026 Compared with Six Months Ended March 31, 2025

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

Consolidated Results

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

28 unchanged sentences

Total Revenues

Total revenues increased by $422 million, or 13%, to $3,572 million for the six months ended March 31, 2026 from $3,150 million for the six months ended March 31, 2025.

Revenue growth was impacted by $12 million of Recorded Music digital revenue from the DSP True-Up and Settlement Payments in the current year and $4 million in the prior year.

Revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $12 million lower Recorded Music streaming revenue compared to the six months ended March 31, 2025.

Total revenues increased by $597 million, or 12%, to $5,436 million for the nine months ended June 30, 2026 from $4,839 million for the nine months ended June 30, 2025.

Recorded Music digital revenue growth was impacted by a digital revenue settlement of $12 million in the current year and $4 million in the prior year (the “DSP True-Up and Settlement Payments”), as well as $16 million of the Copyright Settlement in the prior year.

Revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $22 million lower Recorded Music streaming revenue compared to the nine months ended June 30, 2025.

Music Publishing revenue was impacted by $17 million of revenue in the prior year recognized in connection with historical matched royalties that were processed to date by the Mechanical Licensing Collective (the “MLC Historical Matched Royalties”).

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenues for each of the six months ended March 31, 2026 and March 31, 2025.

Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenues for each of the nine months ended June 30, 2026 and June 30, 2025.

Prior to intersegment eliminations, U.S.

and international revenues represented 42% and 58% for the six months ended March 31, 2026, respectively, and 43% and 57% for the six months ended March 31, 2025, respectively.

Total digital revenues after intersegment eliminations increased by $280 million, or 13%, to $2,389 million for the six months ended March 31, 2026 from $2,109 million for the six months ended March 31, 2025.

Total streaming revenue increased 14% primarily driven by an increase in streaming revenue at Recorded Music.

Total digital revenues remained constant at 67% of consolidated revenues for each of the six months ended March 31, 2026 and March 31, 2025.

Prior to intersegment eliminations, total digital revenues for the six months ended March 31, 2026 were composed of U.S.

and international revenues represented 42% and 58% for the nine months ended June 30, 2026, respectively, and 43% and 57% for the nine months ended June 30, 2025, respectively.

Total digital revenues after intersegment eliminations increased by $399 million, or 12%, to $3,640 million for the nine months ended June 30, 2026 from $3,241 million for the nine months ended June 30, 2025.

Total streaming revenue increased 13% driven by increases in streaming revenue at Recorded Music and Music Publishing.

Total digital revenues remained constant at 67% of consolidated revenues for each of the nine months ended June 30, 2026 and June 30, 2025.

Prior to intersegment eliminations, total digital revenues for the nine months ended June 30, 2026 were composed of U.S.

revenues of $1,627 million and international revenues of $2,014 million, or 45% and 55% of total digital revenues, respectively.

Prior to intersegment eliminations, total digital

revenues for the six months ended March 31, 2025 were composed of U.S.

revenues for the nine months ended June 30, 2025 were composed of U.S.

revenues of $1,533 million and international revenues of $1,709 million, or 47% and 53% of total digital revenues, respectively.

Recorded Music revenues increased by $340 million to $2,860 million for the six months ended March 31, 2026 compared to $2,520 million for the six months ended March 31, 2025, which includes $93 million of favorable currency exchange fluctuations.

Recorded Music revenues were $1,142 million and $1,029 million, or 40% and 41% of consolidated Recorded Music revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

International Recorded Music revenues were $1,718 million and $1,491 million, or 60% and 59% of consolidated Recorded Music revenues for the six months ended March 31, 2026 and March 31, 2025, respectively.

Recorded Music revenues increased by $474 million to $4,348 million for the nine months ended June 30, 2026 compared to $3,874 million for the nine months ended June 30, 2025, which includes $106 million of favorable currency exchange fluctuations.

Recorded Music revenues were $1,729 million and $1,565 million, or 40% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025.

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

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

Digital revenue increased by $237 million for the six months ended March 31, 2026 compared to the six months ended March 31, 2025, which includes a favorable impact of currency exchange fluctuations of $60 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the BMG Termination of $12 million in the prior year.

Revenue from streaming services increased $242 million to $1,921 million for the six months ended March 31, 2026 compared to $1,679 million for the six months ended March 31, 2025, which includes the favorable impact of foreign currency exchange rates of $58 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the BMG Termination of $12 million in the prior year.

Download and other digital revenues decreased by $5 million, or 14%, to $30 million for the six months ended March 31, 2026 from $35 million for the six months ended March 31, 2025, primarily due to the continued shift to streaming services.

Digital revenue increased by $324 million for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025, which includes a favorable impact of currency exchange fluctuations of $74 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the Copyright Settlement of $16 million and the BMG Termination of $22 million in the prior year.

Adjusted for these items, digital revenue increased $354 million, or 14%.

Revenue from streaming services increased $348 million to $2,922 million for the nine months ended June 30, 2026 compared to $2,574 million for the nine months ended June 30, 2025, which includes the favorable impact of foreign currency exchange rates of $72 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the BMG Termination of $22 million in the prior year.

Adjusted for these items, streaming revenue increased $362 million, or 14%.

Download and other digital revenues decreased by $24 million, or 35%, to $45 million for the nine months ended June 30, 2026 from $69 million for the nine months ended June 30, 2025, primarily due to the continued shift to streaming services, and reflects the impact of the Copyright Settlement of $16 million in the prior year.

Artist services and expanded-rights revenue increased by $111 million, or 22%, attributable to higher concert promotion revenue primarily in France, higher merchandising revenue and the favorable impact of foreign currency exchange rates of $15 million.

Physical revenue increased by $29 million, or 7%, driven by strong U.S.

releases in the current year as well as catalog and carryover success and a favorable impact of foreign currency exchange rates of $9 million, partially offset by strong releases in Japan and Korea the prior year.

releases in the current year as well as catalog and carryover success and a favorable impact of foreign currency exchange rates of $7 million, partially offset by strong releases in Korea and Japan in the prior year.

Licensing revenue increased by $10 million, or 3%, primarily driven by the favorable impact of foreign currency exchange rates of $10 million.

Top sellers for the six months ended March 31, 2026 included Alex Warren, sombr, Bruno Mars, Ed Sheeran and Melanie Martinez.

Music Publishing revenues increased by $82 million, or 13%, to $715 million for the six months ended March 31, 2026 from $633 million for the six months ended March 31, 2025.

Music Publishing revenues were $368 million and $334 million, or 51% and 53% of consolidated Music Publishing revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

International Music Publishing revenues were $347 million and $299 million, or 49% and 47% of Music Publishing revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

Top sellers for the nine months ended June 30, 2026 included Alex Warren, sombr, Bruno Mars, Ed Sheeran and Benson Boone.

Music Publishing revenues increased by $123 million, or 13%, to $1,092 million for the nine months ended June 30, 2026 from $969 million for the nine months ended June 30, 2025.

Music Publishing revenues were $562 million and $520 million, or 51% and 54% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.

International Music Publishing revenues were $530 million and $449 million, or 49% and 46% of Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.

The overall increase in Music Publishing revenue was attributable to increases in digital revenue of $75 million, or 13%, performance revenue of $14 million, or 8%, synchronization revenue of $28 million, or 20%, and mechanical revenue of $8 million, or 17%.

The increase in digital revenue was primarily driven by continued growth in streaming revenue, partially offset by the impact of the MLC Historical Matched Royalties of $17 million in the prior year.

Revenue from streaming services grew by $44 million, or 11%, to $434 million for the six months ended March 31, 2026 from $390 million for the six months ended March 31, 2025, reflecting the impact of new deals and renewals, continued market growth and a favorable impact of foreign currency exchange rates of $10 million.

The growth in performance revenue is attributable to growth from touring, radio and live events primarily in Europe, and the growth in synchronization revenue is attributable to the timing of other copyright infringement settlements, higher television and commercial licensing activity, and the $4 million impact of our acquisition of Tempo.

Adjusted for the impact of the MLC Historical Matched Royalties of $17 million, digital revenue increased $92 million, or 16%.

Revenue from streaming services grew by $73 million, or 12%, to $665 million for the nine months ended June 30, 2026 from $592 million for the nine months ended June 30, 2025, reflecting continued market growth and the impact of new deals and renewals, and a favorable impact of foreign currency exchange rates of $11 million.

The growth in mechanical revenue is primarily driven by the impact of new deals and the timing of distributions.

Revenue by Geographical Location

revenue increased by $147 million, or 11%, to $1,510 million for the six months ended March 31, 2026 from $1,363 million for the six months ended March 31, 2025.

Recorded Music revenue increased by $113 million, or 11%, primarily driven by an increase in digital revenue of $65 million, or 9%, which reflects higher streaming revenue of $67 million, or 9%, partially offset by lower download and other digital revenue of $2 million, or 11%.

The increase in streaming revenue is largely attributable to the impacts of the DSP True-Up and Settlement Payments in both the current and prior years, as well as the BMG Termination in the prior year.

The decrease in download and other digital revenue is due to the continued shift to streaming.

revenue increased by $206 million, or 10%, to $2,291 million for the nine months ended June 30, 2026 from $2,085 million for the nine months ended June 30, 2025.

Recorded Music revenue increased by $164 million, or 10%, primarily driven by an increase in digital revenue of $79 million, or 7%, which reflects higher streaming revenue of $98 million, or 9%, partially offset by lower download and other digital revenue of $19 million, or 43%, and the impacts of the DSP True-Up and Settlement Payments of $5 million in the current year, as well as the Copyright Settlement of $16 million and the BMG Termination of $15 million in the prior year.

The decrease in download and other digital revenue is due to the continued shift to streaming and includes the $16 million impact of the Copyright Settlement in the prior year.

Recorded Music physical revenue increased by $46 million, or 27%, driven by strong releases in the current year as well as catalog and carryover success.

Recorded Music artist services and expanded-rights revenue increased by $14 million, or 19%, driven by higher merchandising revenue, and licensing revenue increased by $9 million, or 13%, primarily driven by higher copyright infringement settlements compared to the prior year.

Music Publishing revenue increased by $34 million, or 10%, to $368 million for the six months ended March 31, 2026 from $334 million for the six months ended March 31, 2025.

Music Publishing digital revenue increased by $8 million, attributable to higher streaming revenue of $9 million, or 4%, partially offset by a decrease in download and other digital revenue of $1 million.

Music Publishing synchronization revenue increased by $24 million, or 47%, driven by timing of other

Recorded Music artist services and expanded-rights revenue increased by $21 million, or 18%, driven by higher merchandising revenue of approximately $26 million, partially offset by a decrease in other artists services and expanded-rights revenue, including advertising revenue.

Licensing revenue increased by $18 million, or 17%, primarily driven by higher copyright infringement settlements of approximately $13 million compared to the

Music Publishing revenue increased by $42 million, or 8%, to $562 million for the nine months ended June 30, 2026 from $520 million for the nine months ended June 30, 2025.

Music Publishing digital revenue increased by $15 million, attributable to higher streaming revenue of $16 million, or 5%, partially offset by a decrease in download and other digital revenue of $1 million, and the impact of the MLC Historical Matched Royalties of $17 million in the prior year.

Music Publishing synchronization revenue increased by $27 million, or 31%, driven by timing of other copyright infringement settlements, higher television and commercial licensing activity and the impact of acquisitions.

Music Publishing mechanical revenue increased by $2 million, or 20%, and U.S.

Music Publishing performance revenue increased $1 million, or 3%, for the six months ended March 31, 2026 compared to the six months ended March 31, 2025.

International revenue increased by $275 million, or 15%, to $2,065 million for the six months ended March 31, 2026 from $1,790 million for the six months ended March 31, 2025.

Music Publishing performance revenue decreased $1 million, or 2%, for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025.

International revenue increased by $391 million, or 14%, to $3,149 million for the nine months ended June 30, 2026 from $2,758 million for the nine months ended June 30, 2025.

Excluding the favorable impact of foreign currency exchange rates of $130 million, international revenue increased by $261 million, or 9%.

International Recorded Music revenue increased by $227 million, driven by increases in digital revenue of $172 million, artist services and expanded-rights revenue of $68 million, licensing revenue of $1 million, partially offset by a decrease in physical revenue of $14 million.

International Recorded Music digital revenue increased by $172 million, attributable to higher streaming revenue of $175 million which includes the impact of certain DSP True-Up and Settlement Payments in the current and prior years, as well as the BMG Termination in the prior year, and a favorable impact of foreign currency exchange rates of $58 million, partially offset by lower download and other digital revenue of $3 million.

International Recorded Music artist services and expanded-rights revenue increased by $68 million, primarily due to higher concert promotion revenue in France, and international Recorded Music licensing revenue slightly increased by $1 million.

International Recorded Music physical revenue decreased by $14 million, driven by strong releases primarily in Japan and Korea in the prior year, partially offset by a favorable impact of foreign currency exchange rates of $9 million.

International Music Publishing revenue increased by $48 million, or 16%, to $347 million for the six months ended March 31, 2026 from $299 million for the six months ended March 31, 2025.

This was driven by increases in digital revenue of $36 million, performance revenue of $12 million due to higher concert, touring and live events revenue, and mechanical revenue of $4 million, partially offset by a decrease in synchronization revenue of $2 million.

International Recorded Music revenue increased by $310 million, driven by increases in digital revenue of $245 million and artist services and expanded-rights revenue of $90 million, partially offset by a decrease in physical revenue of $17 million and in licensing revenue of $8 million.

International Recorded Music digital revenue increased by $245 million, attributable to higher streaming revenue of $250 million and a favorable impact of foreign currency exchange rates of $72 million, partially offset by lower download and other digital revenue of $5 million, and the impacts of the DSP True-Up and Settlement Payments of $7 million in the current year and $4 million in the prior year, as well as the BMG Termination of $7 million in the prior year.

International Recorded Music artist services and expanded-rights revenue increased by $90 million, primarily due to higher concert promotion revenue in France.

International Recorded Music physical revenue decreased by $17 million, driven by strong releases primarily in Korea and Japan in the prior year, partially offset by a favorable impact of foreign currency exchange rates of $7 million, and international Recorded Music licensing revenue decreased by $8 million primarily due to higher licensing activity in the prior year.

International Music Publishing revenue increased by $81 million, or 18%, to $530 million for the nine months ended June 30, 2026 from $449 million for the nine months ended June 30, 2025.

This was driven by increases in digital revenue of $60 million, performance revenue of $15 million due to higher concert, touring and live events revenue, mechanical revenue of $6 million, and synchronization revenue of $1 million.

International Music Publishing digital growth is primarily driven by streaming revenue growth of $57 million, or 24%.

1 unchanged sentence

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

2 unchanged sentences

Total cost of revenues $ 2,927 $ 2,598 $ 329 13 %

Artist and repertoire costs increased by $156 million, to $1,261 million for the six months ended March 31, 2026 from $1,105 million for the six months ended March 31, 2025.

Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the six months ended March 31, 2026 and March 31, 2025.

Product costs increased by $76 million, to $656 million for the six months ended March 31, 2026 from $580 million for the six months ended March 31, 2025.

Product costs as a percentage of revenue remained constant at 18% for each of the six months ended March 31, 2026 and March 31, 2025.

Artist and repertoire costs increased by $225 million, to $1,914 million for the nine months ended June 30, 2026 from $1,689 million for the nine months ended June 30, 2025.

Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the nine months ended June 30, 2026 and June 30, 2025.

Product costs increased by $104 million, to $1,013 million for the nine months ended June 30, 2026 from $909 million for the nine months ended June 30, 2025.

Product costs as a percentage of revenue remained constant at 19% for each of the nine months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expenses

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

4 unchanged sentences

______________________________________

(1) Includes depreciation expense of $62 million and $57 million for the six months ended March 31, 2026 and March 31, 2025, respectively.

Total selling, general and administrative expense decreased by $6 million, to $918 million for the six months ended March 31, 2026 from $924 million for the six months ended March 31, 2025, driven by savings from the Company’s restructuring plans, of which a portion has been reinvested into the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of approximately $22 million.

Expressed as a percentage of revenue, total selling, general and administrative

expense decreased to 26% for the six months ended March 31, 2026, from 29% for the six months ended March 31, 2025 due to the factors noted below.

General and administrative expense decreased by $25 million to $535 million for the six months ended March 31, 2026 from $560 million for the six months ended March 31, 2025.

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

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

Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 25% for the nine months ended June 30, 2026, from 29% for the nine months ended June 30, 2025 due to the factors noted below.

General and administrative expense decreased by $43 million to $799 million for the nine months ended June 30, 2026 from $842 million for the nine months ended June 30, 2025.

The decrease in general and administrative expense was driven by savings from the Company’s restructuring plans, of which a portion has been reinvested into the Company’s business and lower non-cash stock-based compensation expense of $17 million, partially offset by higher depreciation expense of $9 million related to technology assets being placed into service, including the core financials component of our new technology platform.

Expressed as a percentage of revenue, general and administrative expense decreased to 15% for the six months ended March 31, 2026 from 18% for the six months ended March 31, 2025 due to the factors noted above.

Selling and marketing expense increased by $7 million, or 2%, to $322 million for the six months ended March 31, 2026 from $315 million for the six months ended March 31, 2025.

Expressed as a percentage of revenue, selling and marketing expense decreased to 9% for the six months ended March 31, 2026, from 10% for the six months ended March 31, 2025, due to lower variable marketing spend and savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.

Distribution expense increased by $12 million to $61 million for the six months ended March 31, 2026 from $49 million for the six months ended March 31, 2025.

Expressed as a percentage of revenue, distribution expense remained constant at 2% for each of the six months ended March 31, 2026 and March 31, 2025.

Expressed as a percentage of revenue, general and administrative expense decreased to 15% for the nine months ended June 30, 2026 from 17% for the nine months ended June 30, 2025 due to the factors noted above.

Selling and marketing expense increased by $4 million, or 1%, to $486 million for the nine months ended June 30, 2026 from $482 million for the nine months ended June 30, 2025.

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

Distribution expense increased by $26 million to $97 million for the nine months ended June 30, 2026 from $71 million for the nine months ended June 30, 2025.

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

Reconciliation of Net Income Attributable to Warner Music Group Corp.

3 unchanged sentences

to operating income for purposes of the discussion that follows (in millions):

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

5 unchanged sentences

Income before income taxes 767 384 383 100 %

Other income (41) (89) 48 -54 %

Other (income) expense (52) 48 (100) — %

Interest expense, net 135 119 16 13 %

5 unchanged sentences

Transformation initiatives and other related costs 39 54 (15) -28 %

Executive transition costs — 4 (4) -100 %

Net loss on divestitures 5 — 5 — %

2 unchanged sentences

Adjusted OIBDA

Adjusted OIBDA increased by $194 million to $860 million for the six months ended March 31, 2026 as compared to $666 million for the six months ended March 31, 2025, driven by the impacts of the DSP True-Up and Settlement Payments of $7 million in the current year and $3 million in the prior year, and the $4 million impact of the MLC Historical Matched Royalties and the $1 million impact of the BMG Termination in the prior year, as well as revenue mix, savings from the Company’s strategic restructuring plans, a portion of which has been reinvested in the Company’s business, and favorable movements in currency exchange rates of approximately $13 million.

Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 24% for the six months ended March 31, 2026 from 21% for the six months ended March 31, 2025.

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

Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 24% for the nine months ended June 30, 2026 from 21% for the nine months ended June 30, 2025.

Non-cash stock-based compensation and other related costs

Our non-cash stock-based compensation and other related costs decreased by $1 million to $32 million for the six months ended March 31, 2026 from $33 million for the six months ended March 31, 2025.

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

Net loss on divestitures

Net loss on divestitures during the six months ended March 31, 2026 includes a pre-tax loss of $5 million in connection with the divestiture of certain assets.

There was no net loss on divestitures during the six months ended March 31, 2025.

Net loss on divestitures during the nine months ended June 30, 2026 includes a pre-tax loss of $5 million in connection with the divestiture of certain assets.

There was no net loss on divestitures during the nine months ended June 30, 2025.

Executive transition costs

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

Executive transition costs were $4 million during the nine months ended June 30, 2025, which consisted of severance costs associated with the departure of our former CFO during fiscal 2025.

Transformation initiatives and other related costs

Our transformation initiatives and other related costs decreased by $6 million to $29 million for the six months ended March 31, 2026 from $35 million for the six months ended March 31, 2025.

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

Restructuring and Impairments

Our restructuring and impairment charges remained constant at $40 million for each of the six months ended March 31, 2026 and March 31, 2025.

The current year includes an impairment charge of $11 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

Our restructuring and impairment charges decreased to $47 million for the nine months ended June 30, 2026 from $109 million for the nine months ended June 30, 2025.

The current year includes an additional impairment charge of $14 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025, while the prior year includes the initial impairment charge of $70 million for long-lived assets associated with EMP.

Depreciation expense

Our depreciation expense increased by $5 million to $62 million for the six months ended March 31, 2026 from $57 million for the six months ended March 31, 2025.

Our depreciation expense increased by $9 million to $95 million for the nine months ended June 30, 2026 from $86 million for the nine months ended June 30, 2025.

This increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.

Amortization expense

Our amortization expense increased by $21 million, or 18%, to $140 million for the six months ended March 31, 2026 from $119 million for the six months ended March 31, 2025.

The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by EMP intangible assets, which have been classified as held for sale.

Our amortization expense increased by $32 million, or 17%, to $218 million for the nine months ended June 30, 2026 from $186 million for the nine months ended June 30, 2025.

The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by a decrease of approximately $4 million from the classification of EMP intangible assets as held for sale.

Operating income

Our operating income increased by $170 million to $552 million for the six months ended March 31, 2026 from $382 million for the six months ended March 31, 2025.

Our operating income increased by $306 million to $857 million for the nine months ended June 30, 2026 from $551 million for the nine months ended June 30, 2025.

The increase in operating income was due to the same factors affecting Adjusted OIBDA discussed above, partially offset by higher amortization expenses of $32 million and higher depreciation expenses of $9 million, as noted above.

Interest expense, net

Our interest expense, net, increased to $86 million for the six months ended March 31, 2026 from $76 million for the six months ended March 31, 2025, primarily due to incremental debt related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo Music in the prior year, as well as incremental debt related to the Beethoven Credit Agreement, partially offset by lower interest rates on variable rate debt in the quarter.

Other income for the six months ended March 31, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $21 million, currency exchange gains on our intercompany loans of $13 million, and realized and unrealized losses on hedging activity of $1 million.

This compares to foreign currency gains on our Euro-denominated debt of $27 million, currency exchange gains on our intercompany loans of $19 million, realized gains on the sale of an investment of $29 million, and realized and unrealized gains on hedging activity of $9 million for the six months ended March 31, 2025.

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

Other (income) expense

Other income for the nine months ended June 30, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $24 million, currency exchange gains on our intercompany loans of $12 million, and realized and unrealized losses on hedging activity of $2 million.

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

Loss on extinguishment of debt

We recorded a loss on extinguishment of debt in the amount of $7 million for the six months ended March 31, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs in connection with the refinancing of our Tranche B Term Loans.

There was no loss on extinguishment of debt for the six months ended March 31, 2025.

We recorded a loss on extinguishment of debt in the amount of $7 million for the nine months ended June 30, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs in connection with the refinancing of our Tranche B Term Loans.

There was no loss on extinguishment of debt for the nine months ended June 30, 2025.

Income tax expense

Our income tax expense increased by $26 million to $144 million for the six months ended March 31, 2026 from $118 million for the six months ended March 31, 2025.

The increase of $26 million in income tax expense is primarily due to an increase in pretax income in the current year and a taxable gain on the Company’s sale of certain recorded music catalog rights to Beethoven JV, partially offset by the tax benefit associated with partial release of valuation allowance on EMP.

Net income increased by $79 million to $356 million for the six months ended March 31, 2026 from $277 million for the six months ended March 31, 2025 as a result of the factors described above.

Our income tax expense increased by $88 million to $211 million for the nine months ended June 30, 2026 from $123 million for the nine months ended June 30, 2025.

The increase of $88 million in income tax expense is primarily due to an increase in pre-tax

income in the current year, taxable gain on the Company’s sale of certain recorded music catalog rights to Beethoven JV, and an $18 million smaller benefit from EMP impairment in the current year.

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

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

Noncontrolling interest

There was income attributable to noncontrolling interest of $3 million for the six months ended March 31, 2026 compared to a loss of $5 million for the six months ended March 31, 2025.

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

Business Segment Results

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

18 unchanged sentences

Transformation initiatives and other related costs 39 54 (15) -28 %

Net gain on divestitures 5 — 5 — %

Executive transition costs — 4 (4) -100 %

Net loss on divestitures 5 — 5 — %

Non-cash stock-based compensation and other related costs 25 21 4 19 %

5 unchanged sentences

Recorded Music

Recorded Music revenues increased by $340 million to $2,860 million for the six months ended March 31, 2026 compared to $2,520 million for the six months ended March 31, 2025, U.S.

Recorded Music revenues were $1,142 million and $1,029 million, or 40% and 41% of consolidated Recorded Music revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

International Recorded Music revenues were $1,718 million and $1,491 million, or 60% and 59% of consolidated Recorded Music revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

Recorded Music revenues increased by $474 million to $4,348 million for the nine months ended June 30, 2026 compared to $3,874 million for the nine months ended June 30, 2025.

Recorded Music revenues were $1,729 million and $1,565 million, or 40% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025.

International

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

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

1 unchanged sentence

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

2 unchanged sentences

Total cost of revenues $ 2,244 $ 1,991 $ 253 13 %

Recorded Music cost of revenues increased by $182 million, to $1,467 million for the six months ended March 31, 2026 from $1,285 million for the six months ended March 31, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the six months ended March 31, 2026 and March 31, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 23% for each of the six months ended March 31, 2026 and March 31, 2025.

Recorded Music cost of revenues increased by $253 million, to $2,244 million for the nine months ended June 30, 2026 from $1,991 million for the nine months ended June 30, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the nine months ended June 30, 2026 and June 30, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 23% for each of the nine months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

4 unchanged sentences

______________________________________

(1) Includes depreciation expense of $22 million and $28 million for the six months ended March 31, 2026 and March 31, 2025, respectively.

Recorded Music selling, general and administrative expense decreased by $13 million, to $677 million for the six months ended March 31, 2026 from $690 million for the six months ended March 31, 2025, which includes unfavorable movements in foreign currency exchange rates of $21 million.

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

Recorded Music selling, general and administrative expense decreased by $22 million, to $1,013 million for the nine months ended June 30, 2026 from $1,035 million for the nine months ended June 30, 2025, which includes unfavorable movements in foreign currency exchange rates of $23 million.

The decrease in general and administrative expense was primarily due to savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business, and lower non-cash stock-based compensation and other related expenses of $21 million.

1 unchanged sentence

The increase in distribution expense was primarily due to revenue mix from higher merchandising and physical revenues.

Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 24% for the six months ended March 31, 2026 from 27% for the six months ended March 31, 2025.

Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 23% for the nine months ended June 30, 2026 from 27% for the nine months ended June 30, 2025.

Operating Income and Adjusted OIBDA

Recorded Music operating income increased by $176 million to $617 million for the six months ended March 31, 2026 from $441 million for the six months ended March 31, 2025.

Recorded Music operating income increased by $301 million to $943 million for the nine months ended June 30, 2026 from $642 million for the nine months ended June 30, 2025.

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

Recorded Music Adjusted OIBDA increased by $156 million, to $749 million for the six months ended March 31, 2026 from $593 million for the six months ended March 31, 2025, largely attributable to savings from the Company’s strategic restructuring plans, of which a portion has been reinvested in the Company’s business, the impact of the DSP True-Up and Settlement Payments of $7 million in the current year and favorable movements in foreign currency exchange rates of approximately $9 million, partially offset by the prior year $3 million impact of the DSP True-Up and Settlement Payments and $1 million impact of the BMG Termination.

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 26% for the six months ended March 31, 2026 from 24% for the six months ended March 31, 2025, due to the factors noted above.

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

savings from the Company’s strategic restructuring plans, of which a portion has been reinvested in the Company’s business and the impact of the DSP True-Up and Settlement Payments of $7 million in the current year, partially offset by the $3 million impact of the DSP True-Up and Settlement Payments, the $9 million impact of the Copyright Settlement and $2 million impact of the BMG Termination in the prior year, and unfavorable movements in foreign currency exchange rates of approximately $2 million.

Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 26% for the nine months ended June 30, 2026 from 24% for the nine months ended June 30, 2025, due to the factors noted above.

Music Publishing

Music Publishing revenues increased by $82 million, or 13%, to $715 million for the six months ended March 31, 2026 from $633 million for the six months ended March 31, 2025.

Music Publishing revenues were $368 million and $334 million, or 51% and 53% of consolidated Music Publishing revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

International Music Publishing revenues were $347 million and $299 million, or 49% and 47% of consolidated Music Publishing revenues, for the six months ended March 31, 2026 and March 31, 2025, respectively.

Music Publishing revenues increased by $123 million, or 13%, to $1,092 million for the nine months ended June 30, 2026 from $969 million for the nine months ended June 30, 2025.

Music Publishing revenues were $562 million and $520 million, or 51% and 54% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.

International Music Publishing revenues were $530 million and $449 million, or 49% and 46% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.

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

1 unchanged sentence

Music Publishing cost of revenues were composed of the following amounts (in millions):

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

1 unchanged sentence

Total cost of revenues $ 687 $ 612 $ 75 12 %

Music Publishing cost of revenues increased by $48 million, or 12%, to $452 million for the six months ended March 31, 2026 from $404 million for the six months ended March 31, 2025.

Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues decreased to 63% for the six months ended March 31, 2026 from 64% for the six months ended March 31, 2025.

Music Publishing cost of revenues increased by $75 million, or 12%, to $687 million for the nine months ended June 30, 2026 from $612 million for the nine months ended June 30, 2025.

Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the nine months ended June 30, 2026 and June 30, 2025.

Selling, general and administrative expense

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

For the Six Months Ended

March 31, 2026 vs.

For the Nine Months Ended

June 30, 2026 vs.

2026 2025 $ Change % Change

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(1) Includes depreciation expense of $1 million and $3 million for the six months ended March 31, 2026 and March 31, 2025, respectively.

Music Publishing selling, general and administrative expense slightly increased to $68 million for the six months ended March 31, 2026 from $67 million for the six months ended March 31, 2025.

Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense decreased to 10% for the six months ended March 31, 2026 from 11% for the six months ended March 31, 2025.

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

Music Publishing selling, general and administrative expense increased to $104 million for the nine months ended June 30, 2026 from $101 million for the nine months ended June 30, 2025.

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

Operating Income and Adjusted OIBDA

Music Publishing operating income increased by $19 million to $126 million for the six months ended March 31, 2026 from $107 million operating income for the six months ended March 31, 2025 largely due to the factors that impacted Music Publishing Adjusted OIBDA noted below, coupled with lower depreciation expenses of $2 million, partially offset by higher amortization expenses of $14 million related to acquisitions.

Music Publishing Adjusted OIBDA increased by $31 million to $199 million for the six months ended March 31, 2026 from $168 million for the six months ended March 31, 2025, primarily driven by strong operating performance and revenue growth, savings from the Company’s restructuring plans, and favorable movements in foreign exchange rates of approximately $4 million, partially offset by the $4 million impact of the MLC Historical Matched Royalties in the prior year.

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 28% for the six months ended March 31, 2026 from 27% for the six months ended March 31, 2025.

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

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

Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 28% for the nine months ended June 30, 2026 from 27% for the nine months ended June 30, 2025.

Corporate Expenses and Eliminations

Our operating loss from corporate expenses and eliminations increased by $25 million to $191 million for the six months ended March 31, 2026 from $166 million for the six months ended March 31, 2025, primarily due to an increase in restructuring and impairment costs of $13 million, higher depreciation expense of $13 million, higher non-cash stock-based compensation and other related expenses of $8 million and a net loss on divestitures of $5 million, partially offset by lower expenses related to transformation initiatives and related costs of $6 million.

Our Adjusted OIBDA loss from corporate expenses and eliminations decreased by $7 million to $88 million for the six months ended March 31, 2026 from $95 million for the six months ended March 31, 2025, largely due to savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business.

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

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

FINANCIAL CONDITION AND LIQUIDITY

Financial Condition at March 31, 2026

At March 31, 2026, we had $4.719 billion of debt (which is net of $30 million of premiums, discounts and deferred financing costs), $741 million of cash and equivalents (net debt of $3.978 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $738 million of Warner Music Group Corp.

Financial Condition at June 30, 2026

At June 30, 2026, we had $4.710 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $618 million of cash and equivalents (net debt of $4.092 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $854 million of Warner Music Group Corp.

This compares to $4.365 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $532 million of cash and equivalents (net debt of $3.833 billion) and $647 million of Warner Music Group Corp.

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

The financial data for the six months ended March 31, 2026 and March 31, 2025 are unaudited and have been derived from our condensed consolidated interim financial statements included elsewhere herein.

Six Months Ended

The financial data for the nine months ended June 30, 2026 and June 30, 2025 are unaudited and have been derived from our condensed consolidated interim financial statements included elsewhere herein.

Nine Months Ended

Cash provided by (used in):

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Operating Activities

Cash provided by operating activities was $566 million for the six months ended March 31, 2026 as compared with cash provided by operating activities of $401 million for the six months ended March 31, 2025.

Cash provided by operating activities was $708 million for the nine months ended June 30, 2026 as compared with cash provided by operating activities of $447 million for the nine months ended June 30, 2025.

The $261 million increase in cash provided by operating activities was largely a result of strong operating performance.

Investing Activities

Cash used in investing activities was $523 million for the six months ended March 31, 2026 as compared with cash used in investing activities of $202 million for the six months ended March 31, 2025.

The $523 million of cash used in investing activities in the six months ended March 31, 2026 consisted of $29 million relating to investments and acquisitions of businesses, $457 million to acquire music-related assets and $47 million relating to capital expenditures, partially offset by $10 million of proceeds from net divestitures.

The $202 million of cash used in investing activities in the six months ended March 31, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $120 million to acquire music-related assets, and $72 million relating to capital expenditures, partially offset by $36 million of proceeds from the sale of investments.

Cash used in investing activities was $674 million for the nine months ended June 30, 2026 as compared with cash used in investing activities of $273 million for the nine months ended June 30, 2025.

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

The $273 million of cash used in investing activities in the nine months ended June 30, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $152 million to acquire music-related assets, and $111 million relating to capital expenditures, partially offset by $36 million of proceeds from the sale of investments.

Financing Activities

Cash provided by financing activities was $169 million for the six months ended March 31, 2026 as compared with cash used in financing activities of $248 million for the six months ended March 31, 2025.

The $169 million of cash provided by financing activities for the six months ended March 31, 2026 consisted of dividends paid of $200 million, payment of deferred consideration of $42 million, distributions to noncontrolling interest holders of $7 million, taxes paid related to net share settlement of restricted stock units and common stock of $26 million, common stock repurchased and retired of $48 million, deferred financing costs paid of $12 million, partially offset by proceeds from the Beethoven Credit Agreement of $370 million and contributions from redeemable noncontrolling interest holder of $134 million.

The $248 million of cash used in financing activities for the six months ended March 31, 2025 consisted of dividends paid of $189 million, payment of deferred consideration of $23 million, distributions to noncontrolling interest holders of $8 million, taxes paid related to net share settlement of restricted stock units and common stock of $19 million, common stock repurchased and retired of $2 million and other financing activity of $7 million.

Cash provided by financing activities was $59 million for the nine months ended June 30, 2026 as compared with cash used in financing activities of $344 million for the nine months ended June 30, 2025.

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

The $344 million of cash used in financing activities for the nine months ended June 30, 2025 consisted of dividends paid of $283 million, payment of deferred consideration of $23 million, distributions to noncontrolling interest holders of $8 million, taxes paid related to net share settlement of restricted stock units and common stock of $19 million, common stock repurchased and retired of $3 million, repayment of the Term Loan Mortgage of $1 million and other financing activity of $7 million.

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

These sources of liquidity are needed to fund our debt service requirements, working capital requirements, capital expenditure requirements, strategic acquisitions and investments, and dividends, prepayments of debt, repurchases or retirement of our outstanding debt or notes or repurchases of our outstanding equity securities in open market purchases, privately negotiated purchases or otherwise, we may elect to pay or make in the future.

We maintain our cash in various banks and other financial institutions around the world, and in some cases those cash deposits are in

excess of FDIC or other deposit insurance.

securities in open market purchases, privately negotiated purchases or otherwise, we may elect to pay or make in the future.

We maintain our cash in various banks and other financial institutions around the world, and in some cases those cash deposits are in excess of FDIC or other deposit insurance.

In the event of a bank failure or receivership, we may not have access to those cash deposits in excess of the relevant deposit insurance, which could have an adverse effect on our liquidity and financial performance.

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

In addition, our weighted-average interest rate on our outstanding indebtedness has decreased from 10.5% in 2011 to 4.0% as of March 31, 2026.

In addition, our weighted-average interest rate on our outstanding indebtedness has decreased from 10.5% in 2011 to 4.0% as of June 30, 2026.

Our nearest-term maturity date is in 2028.

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

The Company repurchased and retired 750,500 shares for $22 million during the three months ended March 31, 2026.

The Company repurchased and retired 1,670,500 shares for $48 million during the six months ended March 31, 2026.

As of March 31, 2026, approximately $37 million of the $100 million share repurchase authorization remained available.

Existing Debt as of March 31, 2026

As of March 31, 2026, our long-term debt was as follows (in millions):

We did not repurchase any common shares during the three months ended June 30, 2026.

The Company repurchased and retired 1,670,500 shares for $48 million during the nine months ended June 30, 2026.

As of June 30, 2026, approximately $37 million of the $100 million share repurchase authorization remained available.

Existing Debt as of June 30, 2026

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

Revolving Credit Facility (a) $ —

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Tempo Asset-Based Notes due 2050 (c) 311

Unamortized discount (8)

Unamortized discount and unamortized DFCs

Total other long-term debt, including the current portion, net $ 666

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______________________________________

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

There were no loans outstanding under the Revolving Credit Facility at March 31, 2026.

(b) Reflects $500 million of commitments under the Beethoven Credit Agreement with the ability, subject to the consent of the Lenders, 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.

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

There were no loans outstanding under the Revolving Credit Facility at June 30, 2026.

(b) Reflects $750 million of commitments under the Beethoven Credit Agreement.

There were $370 million in loans outstanding under the Beethoven Credit Agreement at June 30, 2026.

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

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Therefore, there can be no assurance that the Company will pay any dividends to holders of the Company’s common stock, or as to the amount of any such dividends.

On February 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, which was paid to stockholders on March 3, 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.

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

On August 5, 2026, the Company’s board of directors declared a cash dividend of $0.20 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on September 1, 2026, to stockholders of record as of the close of business on August 20, 2026.

Covenant Compliance

The Company was in compliance with its covenants under its outstanding notes, the Credit Agreement and the Asset-Based Notes as of March 31, 2026.

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

The Credit Agreement contains a covenant that is tied to a leverage ratio based on EBITDA, which is defined under the Credit Agreement.

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The following is a reconciliation of net income (loss), which is a U.S.

GAAP measure of our operating results, to Adjusted EBITDA as defined, for the most recently ended four fiscal quarters, or the twelve months ended March 31, 2026, for the twelve months ended March 31, 2025 and for the three months ended March 31, 2026 and March 31, 2025.

In addition, the reconciliation includes the calculation of the Senior Secured Indebtedness to Adjusted EBITDA ratio, which we refer to as the Leverage Ratio, under the Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended March 31, 2026.

GAAP measure of our operating results, to Adjusted EBITDA as defined, for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2026, for the twelve months ended June 30, 2025 and for the three months ended June 30, 2026 and June 30, 2025.

The terms and related calculations are defined in the Credit Agreement.

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Twelve Months Ended

March 31, Three Months Ended

June 30, Three Months Ended

2026 2025 2026 2025

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

141 302 30 75

Adjusted EBITDA $ 1,832 $ 1,719 $ 462 $ 456

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(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 $12 million and $60 million related to our finance transformation for the three and twelve months ended March 31, 2026, respectively, as well as $18 million and $73 million for the three and twelve months ended March 31, 2025, respectively.

(c) Reflects costs associated with our transformation initiatives and technology system updates, which includes costs of $10 million and $49 million related to our finance transformation for the three and twelve months ended June 30, 2026, respectively, as well as $19 million and $74 million for the three and twelve months ended June 30, 2025, respectively.

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

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Similarly, the Asset-Based Notes issued by a subsidiary of Tempo Music and the Beethoven Credit Facility are not included in our indebtedness for purposes of calculating the Leverage Ratio.

(g) Reflects expected savings resulting from transformation initiatives, including the 2025 Restructuring Plan, the 2024 Strategic Restructuring Plan, and the 2023 Restructuring Plan, as well as the pro forma impact of certain specified transactions for the three and twelve months ended March 31, 2026.

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

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(i) Reflects the ratio of Total Indebtedness, including Revolving Credit Indebtedness, to Adjusted EBITDA.

This is calculated net of cash and equivalents of the Company as of March 31, 2026 not exceeding $600 million in accordance with the Credit Agreement.

This is calculated net of cash and equivalents of the Company as of June 30, 2026 not exceeding $600 million in accordance with the Credit Agreement.

During a collateral suspension period, whether or not there are any Tranche A Term Loans outstanding, Total Indebtedness to EBITDA Ratio may not exceed 4.00:1.00.

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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 2. Management’s Discussion and Analysis