10-K – 2025-11-20 – wmg-20250930.htm

in interpretation of such laws may occur, that may affect our ability to obtain, maintain, protect or enforce our intellectual property rights. Failure to obtain, maintain, protect or enforce our intellectual property rights could harm our brand or brand recognition and adversely affect our business, results of operations and financial condition.
We also in-license certain major trademarks from third parties, including the WARNER, WARNER MUSIC and WARNER RECORDS trademarks and the “W” logo, pursuant to a perpetual, royalty-free license agreement that may be terminated by the licensor under certain circumstances, including our material breach of the license agreement and certain events of insolvency. Upon any such termination, we may be required to either negotiate a new or reinstated agreement with less favorable terms or otherwise lose our rights to use the licensed trademarks, which may require us to change our corporate name and undergo other significant rebranding efforts. Any such rebranding efforts may be disruptive to our business operations, require us to incur significant expenses and have an adverse effect on our business, financial condition and results of operation.
Our involvement in intellectual property litigation could adversely affect our business.
Our business is highly dependent upon intellectual property, an area that has encountered increased litigation in recent years. If we are alleged to infringe, misappropriate or otherwise violate the intellectual property rights of a third party, any litigation to defend the claim could be costly and would divert the time and resources of management, regardless of the merits of the claim and whether the claim is settled out of court or determined in our favor. There can be no assurance that we would prevail in any such litigation. If we were to lose a litigation relating to intellectual property, we could be forced to pay monetary damages and to cease using certain intellectual property or technologies. Any of the foregoing may adversely affect our business.
Digital piracy and streaming manipulation has and may continue to adversely impact our business.
A substantial portion of our revenue comes from the distribution of music which is potentially subject to unauthorized consumer copying and widespread digital dissemination without an economic return to us, including as a result of “stream-ripping.” There is also a threat from organized industrial piracy. Additionally, in its Global Music Report 2025, IFPI noted the danger of “streaming manipulation,” where bad actors upload tracks to digital music services that are produced using generative AI tools and then use “bots” to generate artificial streams of those tracks, which ultimately diverts royalties from legitimate copyright holders.
If we fail to obtain appropriate relief through the judicial process or the complete enforcement of judicial decisions issued in our favor (or if judicial decisions are not in our favor), if we are unsuccessful in our efforts to lobby governments to enact and enforce strong legal penalties for copyright infringement and streaming manipulation or if we fail to develop effective means of protecting and enforcing our intellectual property rights in these areas, our results of operations, financial position and prospects may suffer.
Generative AI could adversely affect our results.
There are new businesses which are taking the position that the use of copyright-protected material to train a generative AI model is fair use and does not require the consent of the copyright holder. This issue is the subject of multiple litigations, mostly in the United States. We are plaintiffs in some of those litigations. If there is a negative result in those litigations and those businesses could legitimately use our copyright-protected material without our consent to train an AI model that could create vast quantities of new musical works to compete with and dilute the impact of our copyright-protected material on digital music services, it could adversely affect our results.
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If we or our service providers do not maintain the security of information relating to our customers, employees and vendors and our music, security information breaches through cyber security attacks or otherwise could damage our reputation with customers, employees, vendors and artists, and we could incur substantial additional costs, become subject to litigation and our results of operations and financial condition could be adversely affected. Moreover, even if we or our service providers maintain such security, such breaches remain a possibility due to the fact that no data security system is immune from attacks or other incidents.
We receive certain personal information about our customers and potential customers, and we also receive personal information concerning our employees, artists and vendors. In addition, our online operations depend upon the secure transmission of confidential information over public networks. We maintain security measures with respect to such information, but despite these measures, our service providers have experienced security breaches in the past and remain vulnerable to security breaches by computer hackers and others that attempt to penetrate the security measures that we have in place. A compromise of our security systems or our service providers’ security systems (through cyber-attacks, which are rapidly evolving and sophisticated, or otherwise) that results in personal information being obtained by unauthorized persons or other bad acts could adversely affect our reputation with our customers, potential customers, employees, artists and vendors, as well as our operations, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of governmental penalties. Unauthorized persons have also attempted to redirect payments to or from us. If any such attempt were successful, we could lose and fail to recover the redirected funds, which loss could be material. We may also be subject to cyber-attacks that target our music, including not-yet-released music. The theft and premature release of this music may adversely affect our reputation with current and potential artists and adversely impact our results of operations and financial condition. In addition, a security breach could require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations.
We increasingly rely on third-party data storage providers, including cloud storage solution providers, resulting in less direct control over our data. Such third parties may also be vulnerable to security breaches and compromised security systems, which could adversely affect our business.
Evolving laws and regulations concerning data privacy may result in increased regulation and different industry standards, which could result in monetary penalties, increase the costs of operations or limit our activities.
We engage in a wide array of online activities globally and are thus subject to a broad range of related laws and regulations including, for example, those relating to privacy, consumer protection, data retention and data protection, online behavioral advertising, AI, geo-location tracking, text messaging, e-mail advertising, mobile advertising, content regulation, defamation, age verification, the protection of children online, social media and other Internet, mobile and online-related prohibitions and restrictions. The regulatory framework for privacy and data security issues worldwide has become increasingly burdensome and complex, and is likely to continue to be so for the foreseeable future. Practices regarding the collection, use, storage, transmission, security and disclosure of personal information by companies operating over the Internet and mobile platforms are receiving ever-increasing public and governmental scrutiny.
The U.S. government, including Congress, the Federal Trade Commission and the Department of Commerce, has announced that it is reviewing the need for even greater regulation of the collection of information concerning consumer behavior on the Internet and mobile platforms, including regulations aimed at restricting certain targeted advertising practices, the use of location data and disclosures of privacy practices in the online and mobile environments, including with respect to online and mobile applications. State governments are engaged in similar legislative and regulatory activities (including the California Consumer Privacy Act (“CCPA”), effective January 1, 2020, the California Privacy Rights and Enforcement Act, effective January 1, 2023 (“CPRA”) and other analogous statutes in other states). The effects of CCPA and these other recently adopted laws include an increased ability of individuals to control the use of their personal data; heightened transparency obligations; increased obligations of companies to maintain the security of data; and increased exposure to fines or damages for companies that do not accord individuals their specified privacy rights, that experience data breaches or that do not maintain cybersecurity at certain levels of quality.
In addition, privacy and data security laws and regulations around the world are being implemented rapidly and evolving. These new and evolving laws have resulted in greater compliance burdens for companies with global operations. Globally, many government and consumer agencies have also called for new regulation and changes in industry practices with respect to information collected from consumers, electronic marketing and the use of third-party cookies, web beacons and similar technology for online behavioral advertising.
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Our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry practices regarding the collection, use or disclosure of customer data, or regarding the manner in which the express or implied consent of consumers for such collection, use and disclosure is obtained. Such changes may require us to modify our operations, possibly in a material manner, and may limit our ability to develop new products, services, mechanisms, platforms and features that make use of data regarding our customers and potential customers. Any actual or alleged violations of laws and regulations relating to privacy and data security, and any relevant claims, may expose us to potential liability, fines and may require us to expend significant resources in responding to and defending such allegations and claims, regardless of merit. Claims or allegations that we have violated laws and regulations relating to privacy and data security could also result in negative publicity and a loss of confidence in us.
Risks Related to Our Leverage
Our substantial leverage on a consolidated basis could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under our indebtedness.
We have substantial indebtedness. As of September 30, 2025, our total consolidated indebtedness, net of premiums, discounts and deferred financing costs, was $4.365 billion. Further, we would have been able to borrow up to $350 million under our Revolving Credit Facility (as defined later in this Annual Report) as of September 30, 2025.
In February 2025, we acquired Tempo Music and the Company now holds approximately $311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo Music and secured only by certain music rights owned by Tempo Music and is nonrecourse to the Company and its subsidiaries, other than Tempo Music. In addition, in connection with the joint venture we entered into with Bain in June 2025, we entered into a credit facility pursuant to which WMBC can borrow up to $500 million to fund acquisitions of catalogs, which debt will be consolidated on our balance sheet.
Our high degree of leverage could have important consequences for our investors. For example, it may make it more difficult for us to make payments on our indebtedness; increase our vulnerability to general economic and industry conditions, including recessions and periods of significant inflation and financial market volatility; expose us to the risk of increased interest rates because any borrowings we make under the Revolving Credit Facility will bear interest at variable rates; require us to use a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing our ability to fund working capital, capital expenditures and other expenses; limit our ability to refinance existing indebtedness on favorable terms or at all or borrow additional funds in the future for, among other things, working capital, acquisitions or debt service requirements; limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; place us at a competitive disadvantage compared to competitors that have less indebtedness; and limit our ability to borrow additional funds that may be needed to operate and expand our business.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in the indentures governing our outstanding notes as well as under the Senior Credit Facilities. If new indebtedness is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.
The indentures that govern our outstanding notes and the credit agreements that govern the Senior Credit Facilities (as defined later in this Annual Report) contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Those covenants include restrictions on our ability to, among other things, create liens and merge or consolidate. In addition, our Revolving Credit Facility includes additional covenants which restrict our ability to, among other things, incur more indebtedness, pay dividends, redeem stock or make other distributions, make investments, transfer or sell assets and enter into certain transactions with our affiliates. These additional covenants are currently suspended. These covenants will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating. Should these covenants be reinstated, they would limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with the restrictive covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all of our indebtedness. Any such event of default or acceleration could have an adverse effect on the trading price of our common stock.
As a holding company, the Company depends on the ability of its subsidiaries to transfer funds to it to meet its obligations.
The Company is a holding company for all of our operations and is a legal entity separate from its subsidiaries. Dividends and other distributions from the Company’s subsidiaries are the principal sources of funds available to the Company to pay corporate operating expenses, to pay stockholder dividends, to repurchase stock and to meet its other obligations. The inability to receive
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dividends from our subsidiaries could have a material adverse effect on our business, financial condition, liquidity or results of operations.
The subsidiaries of the Company have no obligation to pay amounts due on any liabilities of the Company or to make funds available to the Company for such payments. The ability of our subsidiaries to pay dividends or make other distributions to the Company in the future will depend, among other things, on their earnings, tax considerations and covenants contained in any financing or other agreements. For instance, our Revolving Credit Facility includes covenants restricting the ability of Acquisition Corp. to pay dividends and make distributions. Although these covenants are currently suspended, they will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating. In addition, such payments may be limited as a result of claims against our subsidiaries by their creditors, including suppliers, vendors, lessors and employees.
If the ability of our subsidiaries to pay dividends or make other distributions or payments to the Company is materially restricted by cash needs, bankruptcy or insolvency, or is limited due to operating results or other factors, we may be required to raise cash through the incurrence of debt, the issuance of equity or the sale of assets. However, there is no assurance that we would be able to raise sufficient cash by these means. This could materially and adversely affect our ability to pay our obligations or pay dividends, which could have an adverse effect on the trading price of our common stock.
Our debt agreements contain restrictions that limit our flexibility in operating our business.
The indentures governing our outstanding notes and the credit agreements governing the Senior Credit Facilities contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit our ability and the ability of our restricted subsidiaries to, among other things: create liens on certain debt and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
In addition, our Revolving Credit Facility includes additional covenants that would limit our ability and the ability of our restricted subsidiaries to:
• pay dividends on, and redeem and purchase, equity interests;
• make other restricted payments; make prepayments on, redeem or repurchase certain debt;
• incur certain additional debt; enter into guarantees and hedging arrangements;
• enter into acquisitions and asset sales;
• enter into transactions with affiliates;
• pay dividends or make distributions;
• amend the terms of subordinated debt and unsecured bonds; and
• make certain capital expenditures.
These additional covenants are currently suspended. These covenants will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating. As of September 30, 2025, Acquisition Corp.’s Total Indebtedness to EBITDA Ratio is 2.02x and the term loans achieved corporate credit ratings of BBB- from both S&P and Fitch and Ba1 from Moody’s.
Our ability to borrow additional amounts under the Revolving Credit Facility depends upon satisfaction of these covenants. Events beyond our control can affect our ability to meet these covenants. In addition, under the credit agreement governing the Revolving Credit Facility, a financial maintenance covenant is applicable if at the end of a fiscal quarter the outstanding amount of loans and letters of credit is in excess of $140 million.
Our failure to comply with obligations under the instruments governing our indebtedness may result in an event of default under such instruments. We cannot be certain that we will have funds available to remedy these defaults. A default, if not cured or waived, may permit acceleration of our indebtedness. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.
All of these restrictions could affect our ability to operate our business or may limit our ability to take advantage of potential business opportunities as they arise, and may have an adverse effect on the trading price of our common stock. We may, from time to time, refinance our existing indebtedness, which could result in the agreements governing any new indebtedness having fewer or less restrictive covenants.
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Despite our indebtedness levels, we may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness.
We may be able to incur substantial additional indebtedness, including additional secured indebtedness, in the future. The indentures governing our outstanding notes and the credit agreements governing the Senior Credit Facilities will not prohibit us, Holdings or our subsidiaries from incurring additional indebtedness under certain circumstances. We, Holdings or our subsidiaries may be able to incur substantial additional indebtedness, which may increase the risks created by our current substantial indebtedness.
Our ability to incur secured indebtedness is subject to compliance with certain secured leverage ratios that are calculated as of the date of incurrence. The amount of secured indebtedness that we are able to incur and the timing of any such incurrence under these ratios vary from time to time and are a function of several variables, including our outstanding indebtedness and our results of operations calculated as of specified dates or for certain periods.
To the extent that the terms of our current debt agreements would prevent us from incurring additional indebtedness, we may be able to obtain amendments to those agreements that would allow us to incur such additional indebtedness, and such additional indebtedness could be material.
We will require a significant amount of cash to service our indebtedness. The ability to generate cash or refinance indebtedness as it becomes due depends on many factors, some of which are beyond our control.
Our ability to make scheduled payments on, or to refinance our obligations under, our indebtedness and to fund planned capital expenditures and other corporate expenses will depend on our future operating performance and on economic, financial, competitive, legislative and other factors and any legal and regulatory restrictions on the payment of distributions and dividends to which they may be subject. Many of these factors are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized or that future borrowings will be available to us in an amount sufficient to enable us to satisfy our obligations under our indebtedness or to fund our other needs. To satisfy our obligations under our indebtedness and to fund planned capital expenditures, we must continue to execute our business strategy. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments in recording artists and songwriters, capital expenditures or dividends, or to sell assets, seek additional capital or restructure or refinance our indebtedness. Significant delays in our planned capital expenditures may materially and adversely affect our future revenue prospects. In addition, we cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. While limited by the terms of our debt agreements, if we were to pay dividends to our shareholders, the funds used to make such dividend payments would not be available to service our indebtedness.
A downgrade, suspension or withdrawal of the rating assigned by a rating agency to us could cause the liquidity or market value of our indebtedness to decline and our cost of capital to increase.
Any future downgrade of our ratings may make it more difficult or more expensive for us to obtain additional debt financing. Therefore, although reductions in our debt ratings may not have an immediate impact on the cost of debt or our liquidity, they may impact the cost of debt and liquidity over the medium term and future access at a reasonable rate to the debt markets may be adversely impacted.
Risks Related to Our Controlling Stockholder
Access continues to control us and may have conflicts of interest with other stockholders. Conflicts of interest may arise because affiliates of our controlling stockholder have continuing agreements and business relationships with us.
Access holds approximately 98% of the total combined voting power of our outstanding common stock and approximately 72% of the economic interest of our outstanding common stock. As a result, and in addition to certain other rights granted to Access, Access will continue to be able to control the election of our directors, affect our legal and capital structure, change our management, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. Access also has sufficient voting power to amend our organizational documents. In addition, under the provisions of a stockholder agreement entered into with Access (the “Stockholder Agreement”), the relevant terms of which govern the powers afforded the Company under our organizational documents, Access has consent rights with respect to certain corporate and business activities that we may undertake, including during periods where Access holds less than a majority of the total combined voting power of our outstanding common stock. Specifically, the Stockholder Agreement provides that, until the date on which Access ceases to hold at least 10% of our outstanding common stock, Access’s prior written consent will be required before we may take certain corporate and business actions, whether directly or indirectly through a subsidiary, including, among others, the following:
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• any merger, consolidation or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) with or into any other person whether in a single transaction or a series of transactions, subject to certain specified exceptions;
• any acquisition or disposition of securities, assets or liabilities, subject to certain specified exceptions;
• any change in our authorized capital stock or the creation of any new class or series of our capital stock;
• any issuance or acquisition of capital stock (including stock buy-backs, redemptions or other reductions of capital), or securities convertible into or exchangeable or exercisable for capital stock or equity-linked securities, subject to certain specified exceptions;
• any issuance or acquisition of debt securities to or from a third party, subject to certain specified exceptions; and
• any amendment (or approval or recommendation of any amendment) to our certificate of incorporation or by-laws.
As a result of these consent rights, Access will maintain significant control over our corporate and business activities until such rights cease.
Additionally, until Access ceases to hold more than 50% of the total combined voting power of our outstanding common stock, pursuant to Section 141(a) of the General Corporation Law of the State of Delaware (“DGCL”), our Executive Committee, as the Company’s governing body, has all of the power and authority (including voting power) of our board of directors. The Executive Committee has the authority to approve any actions of the Company, except for matters that must be approved by the Audit Committee of our board of directors (or both the Executive Committee and the Audit Committee), or by a committee or sub-committee qualified to grant equity to persons subject to Section 16 of the Exchange Act for purposes of exempting transactions pursuant to Section 16b-3 thereunder, or as required under Delaware law, SEC rules and NASDAQ rules.
Access also has the power to direct us to engage in strategic transactions, with or involving other companies in our industry, including acquisitions, combinations or dispositions, and the acquisition of certain assets that may become available for purchase, and any such transaction could be material.
Our amended and restated certificate of incorporation and our amended and restated by-laws also include a number of provisions that may discourage, delay or prevent a change in our management or control for so long as Access owns specified percentages of our common stock. See “—Risks Related to Our Common Stock—Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated by-laws and Delaware law could discourage, delay or prevent a change of control of our company and may affect the trading price of our Class A Common Stock.” These provisions not only could have a negative impact on the trading price of our Class A Common Stock, but could also allow Access to delay or prevent a corporate transaction of which the public stockholders approve.
Additionally, Access is in the business of making investments in companies and is actively seeking to acquire interests in businesses that operate in our industry and other industries and may compete, directly or indirectly, with us. Access may also pursue acquisition opportunities that may be complementary to our business, which could have the effect of making such acquisition opportunities unavailable to us. Access could elect to cause us to enter into business combinations or other transactions with any business or businesses in our industry that Access may acquire or control, or we could become part of a group of companies organized under the ultimate common control of Access that may be operated in a manner different from the manner in which we have historically operated. Any such business combination transaction could require that we or such group of companies incur additional indebtedness, and could also require us or any acquired business to make divestitures of assets necessary or desirable to obtain regulatory approval for such transaction. The amounts of such additional indebtedness, and the size of any such divestitures, could be material. Access may also from time to time purchase outstanding debt securities that we issued, and could also subsequently sell any such debt securities. Any such purchase or sale may affect the value of trading price or liquidity of our debt securities. See “—Under our amended and restated certificate of incorporation, Access and its affiliates, and in some circumstances, any of our directors and officers who is also a director, officer, employee, stockholder, member or partner of Access and its affiliates, have no obligation to offer us corporate opportunities.”
Conflicts of interest may arise between our controlling stockholder and us. Affiliates of our controlling stockholder engage in transactions with us. Further, Access may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us, and they may either directly, or through affiliates, also maintain business relationships with companies that may directly compete with us. In general, Access or its affiliates could pursue business interests or exercise their voting power as stockholders in ways that are detrimental to us but beneficial to themselves or to other companies in which they invest or with whom they have a material relationship. In addition, a number of persons who currently are our directors and officers have been and remain otherwise affiliated with Access and, in some cases, such affiliations also involve financial interests. These relationships may create,
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or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for Access and us.
As a result of these relationships, the interests of Access may not coincide with our interests or the interests of the holders of our Class A Common Stock. So long as Access continues to control a significant amount of the total combined voting power of our outstanding common stock, Access will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions.
Under our amended and restated certificate of incorporation, Access and its affiliates, and in some circumstances, any of our directors and officers who are also a director, officer, employee, stockholder, member or partner of Access and its affiliates, have no obligation to offer us corporate opportunities.
The policies relating to corporate opportunities and transactions with Access and its affiliates, set forth in our amended and restated certificate of incorporation, address potential conflicts of interest between the Company, on the one hand, and Access, its affiliates and its directors, officers, employees, stockholders, members or partners who are directors or officers of the Company, on the other hand. Our amended and restated certificate of incorporation provides that we, on our behalf and on behalf of our subsidiaries, renounce any interest or expectancy in, or in being offered an opportunity to participate in, corporate opportunities, that are from time to time presented to Access or any of its affiliates, directors, officers, employees, stockholders, members or partners, even if the opportunity is one that we or our subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so. None of Access, its affiliates or any of its directors, officers, employees, stockholders, members or partners will generally be liable to us or any of our subsidiaries for breach of any fiduciary or other duty, as a director or otherwise, by reason of the fact that such person pursues, acquires or participates in such corporate opportunity, directs such corporate opportunity to another person or fails to present such corporate opportunity, or information regarding such corporate opportunity, to us or our subsidiaries unless, in the case of any such person who is a director or officer, such corporate opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer. To the fullest extent permitted by law, by becoming a stockholder in our company, stockholders will be deemed to have notice of and consented to this provision of our amended and restated certificate of incorporation. Although these provisions are designed to resolve conflicts between us and Access and its affiliates fairly, conflicts may not be resolved in our favor or be resolved at all.
If Access sells a controlling interest in our company to a third party in a private transaction, our stockholders may not realize any change of control premium on shares of our Class A Common Stock and we may become subject to the control of a presently unknown third party.
Access has the ability, should it choose to do so, to sell some or all of its shares of our common stock in a privately negotiated transaction. If such a transaction were to be sufficient in size, it could result in a change of control of the Company. The ability of Access to privately sell such shares of our common stock, with no requirement for a concurrent offer to be made to acquire all of the shares of our Class A Common Stock, could prevent our stockholders from realizing any change of control premium on their shares of our Class A Common Stock that may otherwise accrue to Access upon its private sale of our common stock. Additionally, if Access privately sells a significant equity interest in us, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with the interests of other stockholders.
Risks Related to Our Common Stock
The dual class structure of our common stock and the existing ownership of Class B Common Stock by Access have the effect of concentrating voting control with Access for the foreseeable future, which will limit or preclude the ability of our other stockholders to influence corporate matters.
Our Class A Common Stock has one vote per share and our Class B Common Stock has 20 votes per share. Given the greater number of votes per share attributed to our Class B Common Stock, Access, who is our only Class B Common Stock stockholder, holds approximately 98% of the total combined voting power of our outstanding common stock. As a result of our dual class ownership structure, Access is able to exert a significant degree of influence or actual control over our management and affairs and over matters requiring stockholder approval, including the election of directors, mergers or acquisitions, asset sales and other significant corporate transactions. Further, Access owns shares representing approximately 72% of the economic interest of our outstanding common stock. Because of the 20-to-1 voting ratio between the Class B Common Stock and Class A Common Stock, the holders of Class B Common Stock collectively continue to control a majority of the total combined voting power of our outstanding common stock and therefore are able to control all matters submitted to our stockholders for approval, so long as the outstanding shares of Class B Common Stock represent at least approximately 10% of the total number of outstanding shares of common stock. This concentrated control will limit the ability of our other stockholders to influence corporate matters for the foreseeable future. For example, Access will be able to control elections of directors, amendments of our certificate of incorporation or by-laws, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans and approval of
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any merger or sale of assets for the foreseeable future. This control may materially adversely affect the market price of our Class A Common Stock.
Additionally, the holders of our Class B Common Stock may cause us to make strategic decisions or pursue acquisitions that could involve risks to our other stockholders or may not be aligned with their interests. The holders of our Class B Common Stock will also be entitled to a separate vote in the event we seek to amend our certificate of incorporation.
The difference in the voting rights of our Class A Common Stock and Class B Common Stock may harm the value and liquidity of our Class A Common Stock.
The difference in the voting rights of our Class A Common Stock and Class B Common Stock could harm the value of our Class A Common Stock to the extent that any investor or potential future purchaser of our Class A Common Stock ascribes value to the right of holders of our Class B Common Stock to 20 votes per share of Class B Common Stock. The existence of two classes of common stock could also result in less liquidity for our Class A Common Stock than if there were only one class of our common stock.
Our dual class structure may depress the trading price of our Class A Common Stock.
Our dual class structure may result in a lower or more volatile market price of our Class A Common Stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with dual or multiple class share structures in certain of their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500. These changes exclude companies with multiple classes of shares of common stock from being added to these indices. In addition, several stockholder advisory firms have announced their opposition to the use of dual or multiple class structures. As a result, the dual class structure of our common stock may prevent the inclusion of our Class A Common Stock in these indices and may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A Common Stock. Any actions or publications by stockholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A Common Stock.
Future sales of shares by existing stockholders could cause our stock price to decline.
Sales of substantial amounts of our Class A Common Stock in the public market, or the perception that these sales could occur, could cause the market price of our Class A Common Stock to decline. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
As of September 30, 2025, we had 146,906,334 outstanding shares of Class A Common Stock and 375,380,313 outstanding shares of Class B Common Stock. All of the shares of Class A Common Stock sold in the IPO were immediately tradable without restriction under the Securities Act except for any shares held by “affiliates,” as that term is defined in Rule 144 under the Securities Act, or “Rule 144.”
The remaining shares of Class B Common Stock outstanding subsequent to the consummation of the IPO are restricted securities within the meaning of Rule 144, but will be eligible for resale subject, in certain cases, to applicable volume, manner of sale, holding period and other limitations of Rule 144 or pursuant to an exception from registration under Rule 701 under the Securities Act, or “Rule 701.” Access has the right to require us to register shares of common stock for resale in some circumstances pursuant to a registration rights agreement we entered into with Access. Access has in the past sold shares of common stock pursuant to Rule 144 and in registered offerings to the public and, depending upon market prices for the Company’s common stock, may again do so from time to time.
In addition, 31,169,099 shares of our Class A Common Stock were reserved for future issuances under the Omnibus Incentive Plan adopted in connection with the IPO over the 10-year period from the date of adoption. As of September 30, 2025, there were 29,357,018 shares of Class A Common Stock available to be issued.
In the future, we may issue additional shares of Class A Common Stock, Class B Common Stock or other equity or debt securities convertible into or exercisable or exchangeable for shares of our Class A Common Stock in connection with a financing, strategic investment, litigation settlement or employee arrangement or otherwise. Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our Class A Common Stock to decline.
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The market price of our Class A Common Stock may be volatile and could decline.
The market price of our Class A Common Stock may fluctuate significantly. Among the factors that could affect our stock price are:
• industry or general market conditions;
• domestic and international economic factors unrelated to our performance;
• changes in our customers’ preferences;
• changes in law or regulation;
• lawsuits, enforcement actions and other claims by third parties or governmental authorities;
• adverse publicity related to us or another industry participant;
• actual or anticipated fluctuations in our operating results;
• changes in securities analysts’ estimates of our financial performance or lack of research coverage and reports by industry analysts;
• action by institutional stockholders or other large stockholders (including Access), including future sales of our Class A Common Stock;
• failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices;
• speculation in the press or investment community;
• investor perception of us and our industry;
• changes in market valuations or earnings of similar companies;
• announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships;
• war, terrorist acts, epidemic disease and pandemics;
• any future sales of our Class A Common Stock or other securities;
• additions or departures of key personnel; and
• misconduct or other improper actions of our employees.
Stock markets have experienced extreme volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Class A Common Stock. In the past, following periods of volatility in the market price of a company’s securities, class action litigation has often been instituted against the affected company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which could materially and adversely affect our business, results of operations and financial condition.
Due to the nature of our business, our results of operations, cash flows and the trading price of our common stock may fluctuate significantly from period to period.
Our results of operations are affected by the amount and quality of music that we release, the number of releases that include musical compositions published by us, timing of release schedules and, more importantly, the consumer demand for these releases. We also make advance payments to recording artists and songwriters, which impact our results of operations and operating cash flows. The timing of releases and advance payments is largely based on business and other considerations and is made without regard to the impact of the timing of the release on our financial results. In addition, certain of our license agreements with digital music services contain minimum guarantees and/or require that we are paid minimum guarantee payments. Our results of operations and cash flows in any reporting period may be materially affected by the timing of releases and advance payments and minimum guarantees, which may result in significant fluctuations from period to period, which may have an adverse impact on the price of our Class A Common Stock.
If securities or industry analysts publish misleading or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our Class A Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts downgrades our stock or publishes misleading or unfavorable
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research about our business, our stock price would likely decline. If one or more of the analysts ceases coverage of our Class A Common Stock or fails to publish reports on us regularly, demand for our Class A Common Stock could decrease, which could cause our Class A Common Stock price or trading volume to decline.
Our existing debt securities do, and future offerings of debt or equity securities may, rank senior to our common stock, which may adversely affect the market price of our Class A Common Stock.
As of September 30, 2025, our total consolidated indebtedness, net of premiums, discounts and deferred financing costs, was $4.365 billion, all of which ranks senior to our Class A Common Stock. If, in the future, we decide to issue additional debt or equity securities that rank senior to our Class A Common Stock, it is likely that such securities will also be governed by an indenture or other instrument containing covenants restricting our operating flexibility consistent with our existing debt agreements. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Class A Common Stock and may result in dilution to owners of our Class A Common Stock. We and, indirectly, our stockholders, bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our Class A Common Stock will bear the risk of our future offerings reducing the market price of our Class A Common Stock and diluting the value of their stock holdings in us.
Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated by-laws and Delaware law could discourage, delay or prevent a change of control of our company and may affect the trading price of our Class A Common Stock.
Our amended and restated certificate of incorporation and our amended and restated by-laws include a number of provisions that may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. For example, our amended and restated certificate of incorporation and amended and restated by-laws collectively:
• authorize two classes of common stock with disparate voting power;
• permit different treatment of our Class A Common Stock and Class B Common Stock in a change of control transaction if approved by a majority of the voting power of our outstanding Class A Common Stock and a majority of the voting power of our outstanding Class B Common Stock, voting separately;
• authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;
• provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office once Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock;
• prohibit stockholders from calling special meetings of stockholders if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock;
• prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock;
• establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders;
• require the approval of holders of at least 66 2/3% of the total combined voting power of the outstanding shares of our common stock to amend our amended and restated by-laws and certain provisions of our amended and restated certificate of incorporation if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; and
• subject us to Section 203 of the DGCL, which limits the ability of stockholders holding shares representing more than 15% of the voting power of our outstanding voting stock from engaging in certain business combinations with us, once Access no longer owns at least 5% of the total combined voting power of our outstanding common stock.
These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our Class A Common Stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Class A Common Stock if the provisions are viewed as discouraging takeover attempts in the future.
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Our amended and restated certificate of incorporation and amended and restated by-laws may also make it difficult for stockholders to replace or remove our management. Furthermore, the existence of the foregoing provisions, as well as the significant amount of common stock that Access owns and voting power that Access holds, could limit the price that investors might be willing to pay in the future for shares of our Class A Common Stock. These provisions may facilitate management and board entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.
We are a “controlled company” within the meaning of NASDAQ rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements.
Access holds approximately 98% of the total combined voting power of our outstanding common stock. Accordingly, we qualify as a “controlled company” within the meaning of NASDAQ corporate governance standards. Under NASDAQ rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain NASDAQ corporate governance standards, including:
• the requirement that a majority of the members of our board of directors be independent directors;
• the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
• the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
• the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
We rely on these exemptions. As a result, we are not required to have a majority of independent directors, our compensation and our nominating and corporate governance committees will not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Consequently, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of NASDAQ corporate governance rules and requirements. Our status as a controlled company could make our Class A Common Stock less attractive to some investors or otherwise harm our stock price.
Our amended and restated certificate of incorporation includes provisions limiting the personal liability of our directors for breaches of fiduciary duty under the DGCL.
Our amended and restated certificate of incorporation contains provisions permitted under the action asserting a claim arising under the DGCL relating to the liability of directors. These provisions will eliminate a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving:
• any breach of the director’s duty of loyalty;
• acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;
• Section 174 of the DGCL (unlawful dividends); or
• any transaction from which the director derives an improper personal benefit.
The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL. These provisions, however, should not limit or eliminate our rights or any stockholder’s rights to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. These provisions will not alter a director’s liability under federal securities laws. The inclusion of this provision in our amended and restated certificate of incorporation may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our stockholders.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, other employees, agents or stockholders, (iii) any action asserting a claim arising out of or under the DGCL, or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our amended and restated certificate
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of incorporation or our amended and restated by-laws) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to such Court of Chancery of the State of Delaware having personal jurisdiction over the indispensable parties named as defendants. However, claims subject to exclusive jurisdiction in the federal courts, such as suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or the rules and regulations thereunder, need not be brought in the Court of Chancery of the State of Delaware. Stockholders in our company will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provision in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or any of our directors, officers, other employees, agents or stockholders, which may discourage lawsuits with respect to such claims. Additionally, a court could determine that the exclusive forum provision is unenforceable, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. If a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, results of operations and financial condition.
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ITEM 1B.    UNRESOLVED STAFF COMMENTS
None.

ITEM 1C.    CYBERSECURITY
Cybersecurity Risk Management and Strategy
We recognize the importance of assessing, identifying, and managing risks associated with cybersecurity threats. These risks include, among other things, operational risks; intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy or security laws and reputational risks. We have implemented cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage such risks, including regular network and endpoint monitoring, access controls, vulnerability assessments, penetration testing, annual information security training for employees, and tabletop exercises to inform our professionals’ risk identification and assessment. We have an Incident Response Plan which guides the actions we are to take in the event of a suspected or confirmed cybersecurity incident. The plan includes processes to triage, investigate, contain, and remediate the incident, and is designed to enable us to comply with applicable legal and regulatory obligations and mitigate financial and reputational damage. We also maintain a Business Resumption Plan (for critical tools and applications), which provides procedures for maintaining the continuity of critical business processes in the event of business interruption, including any interruption that involves cybersecurity incidents which may significantly impact our operations. Our cybersecurity risk management processes incorporate appropriate industry standards and are designed using the frameworks developed by National Institute of Standards and Technology (“NIST”).
We review our cybersecurity technology stack and budget allocation by risk and review against the cyber threat landscape to ensure we are spending the right dollars to reduce the highest risk at that time.
Our enterprise risk management program considers cybersecurity threat risks alongside other company risks as part of our overall risk assessment process. Our enterprise risk professionals collaborate with our Chief Information Security Officer (“CISO”), Chief Privacy Officer, Cyber team, Legal team, Physical Security team, and Content Management team, to gather insights for identifying and assessing cybersecurity threats, their severity, and potential mitigations. We conduct monthly Cyber Risk Committee meetings with the participation of these teams to review risks in each of those functions and any cross-functional risks. The Cyber Risk Committee also reviews the industry landscape at these meetings to help ensure we are aware of global and industry cyber activities.
As part of the above processes, we at least annually engage with assessors, consultants, and other third parties to measure and assess our maturity level against standard frameworks. Also, an independent Qualified Security Assessor review regarding Payment Card Industry compliance is performed on a quarterly basis to help ensure we maintain compliance with the PCI standards. These third parties conduct penetration tests and scanning exercises to assess the performance of our cybersecurity controls, systems and processes and overall maturity by NIST categorization. As part of the assessment, they also conduct interviews with key personnel and review key controls. In addition, annually we review our cyber insurance premiums which includes a maturity assessment and the premiums are determined based on the Company’s cybersecurity maturity assessment score .
Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those in our supply chain or who have access to our customer and employee data or our systems. Third-party risks are included within our enterprise risk management assessment program as well as our cybersecurity risk identification program, both of which are discussed above and provided for in our Third-Party Cyber Risk Policy. The Third-Party Cyber Risk Policy sets guidelines for identifying, measuring, monitoring, and reporting the risk associated with third parties relationships, which includes planning, due diligence and third party selection, contracting, ongoing monitoring, and termination. Cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform diligence on third parties that have access to our systems, data or facilities that house such systems or data, and monitor cybersecurity threats identified through such diligence.
During the period covered by this Annual Report, we have not experienced any cybersecurity incidents which have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, institutions like us, as well as our employees, artists, service providers and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of increasingly sophisticated cyber attacks.
See “Risk Factors — If we or our service providers do not maintain the security of information relating to our customers, employees and vendors and our music, security information breaches through cyber security attacks or otherwise could damage our reputation with customers, employees, vendors and artists, and we could incur substantial additional costs, become subject to litigation and our results of operations and financial condition could be adversely affected. Moreover, even if we or our service providers maintain such security, such breaches remain a possibility due to the fact that no data security system is immune from attacks or other incidents.”

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Cybersecurity Governance
Cybersecurity is an important part of our risk management processes and an area of increasing focus for our board of directors and management. Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. At least quarterly, the Audit Committee receives an overview of our cybersecurity threat risk management and strategy processes from our CISO. These sessions typically cover topics such as data security posture, results from third-party assessments, progress towards risk-mitigation-related goals, our incident response plan, and material short-, medium- and long-term risks from cybersecurity threats, incidents and developments, as well as the steps management has taken to respond to such risks. In addition, these sessions include a review of the broader threat landscape and how our business may be affected. Cybersecurity threats are also considered during meetings of our board of directors through discussions of enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management and other relevant matters.
Our cybersecurity risk management and strategy processes are led by our CISO and the Cyber Risk Committee. Our CISO has over 25 years of prior work experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs and controls, as well as relevant certifications, including Certified Industry Systems Security Professional. Our CISO has worked in highly regulated environments for over 20 years and has built strong relations with cybersecurity authorities including the Federal Bureau of Investigation, the Department of Homeland Security, and the Cybersecurity and Infrastructure Security Agency to aid with investigative and intelligence objectives. The Cyber team has an average of over 10 years of cyber-related experience with several senior team members each having over 20 years of cyber experience. Several were also a Chief Information Security Officer or Head of Cybersecurity for their respective former organizations. Other key members of the Cyber team each have over 20 years of relevant experience in Compliance, Audit, Legal, and Data Privacy.
Cyber team members participate in industry forums to collaborate and keep current on emerging risks and new technologies. We also strive to maintain key relationships with relevant government agencies for the purpose of collaborating on matters of cybersecurity.
Through the cybersecurity risk management and strategy processes described above, Cyber Risk Committee members remain informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents. Members participate in the management and operation of our Incident Response Plan, have oversight of our internal information technology departments that report to Cyber Risk Committee meetings, and oversee the implementation, review and revision of the policies underlying our cybersecurity program. Cyber-related incidents, including non-material incidents, typically have a post-mortem exercise completed to review lessons learned and adjust any policies and processes as needed.

ITEM 2.    PROPERTIES
Our principal executive offices and worldwide headquarters are currently located at 1633 Broadway, New York, New York 10019, under a long-term lease ending July 31, 2029. The lease also includes a single option for us to extend the term for either five years or ten years. In addition, under certain conditions, we have the ability to lease additional space in the building and have a right of first refusal with regard to certain additional space. We also have a lease agreement for office space located in the Ford Factory Building at 777 S. Santa Fe Avenue, Los Angeles, California 90021 for an initial term of 12 years and 9 months with a single option to extend the term of the lease for 10 years, set to initially expire on April 30, 2030. This office space is currently used as our Los Angeles, California headquarters. We also own other property and lease facilities elsewhere throughout the world as necessary to operate our businesses. We consider our properties adequate for our current needs.

ITEM 3.    LEGAL PROCEEDINGS
The Company is involved in various litigation and regulatory proceedings arising in the normal course of business. Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Company establishes an accrual. In the currently pending proceedings, the amount of accrual is not material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) the results of ongoing discovery; (2) uncertain damage theories and demands; (3) a less than complete factual record; (4) uncertainty concerning legal theories and their resolution by courts or regulators; and (5) the unpredictable nature of the opposing party and its demands. However, the Company cannot predict with certainty the outcome of any litigation or the potential for future litigation. As such, the Company continuously monitors these proceedings as they develop and adjusts any accrual or disclosure as needed. Regardless of the outcome, litigation could have an adverse impact on the Company, including the Company’s brand value, because of defense costs, diversion of management resources and other factors and it could have a material effect on the Company’s results of operations for a given reporting period.
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ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
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PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information for Common Stock
The Company's Class A Common Stock began trading on the Nasdaq stock market under the symbol “WMG” on June 3, 2020. The Company's Class B Common Stock is not listed on any stock exchange nor traded on any public market.
Holders of Record
As of November 14, 2025, there were approximately 11 stockholders of record of the Company's Class A Common Stock. Because many of our shares of Class A Common Stock are held by brokers and other institutions on behalf of individuals and entities, we excluded the total number of beneficial owners represented by these record holders. As of November 14, 2025, there were 6 stockholders of record of our Class B Common Stock.
Dividend Policy
The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating.
In connection with the IPO, the Company amended its dividend policy whereby it intends to pay quarterly cash dividends to holders of its Class A Common Stock and Class B Common Stock. The declaration of each dividend will continue to be at the discretion of the Company’s board of directors and will depend on the Company’s financial condition, earnings, liquidity and capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and any other factors that the Company’s board of directors deems relevant in making such a determination. 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.
Stock Performance Graph
This performance graph shall not be deemed to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act.
The following graph shows a comparison of the cumulative total return on our Class A Common Stock from September 25, 2020 through September 30, 2025 with the cumulative total return of the Standard & Poor’s 500 Index (“S&P 500 Index”) and the Nasdaq Composite Index over the same period, assuming the investment of $100 in our Class A Common Stock and in each index on September 25, 2020 and the reinvestment of dividends in each of our Class A Common Stock and each index. Through September 30, 2022, the quarterly intervals below are based on the Company’s 52-53 week fiscal year in which each reporting period ended on the last Friday of the respective reporting period. Starting with the 2023 fiscal year, the quarterly intervals below are based on the Company’s modified fiscal year in which each reporting period ends on the last day of the calendar quarter.
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The comparisons in the graph below are based on historical data and are not indicative of, nor intended to forecast, future performance of our Class A Common Stock.

9/25/20 12/24/20 3/26/21 6/25/21 9/24/21 12/31/21 4/1/22 7/1/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 12/31/25 3/31/25 6/30/25 9/30/25
Warner Music Group Corp. $ 100  $ 139  $ 121  $ 137  $ 166  $ 163  $ 140  $ 94  $ 89  $ 135  $ 129  $ 102  $ 123  $ 141  $ 131  $ 122  $ 125  $ 131  $ 127  $ 111  $ 139 
S&P 500 Index 100  113  121  131  137  147  141  119  112  121  130  141  136  152  168  175  186  218  182  202  219 
Nasdaq Comp. Index
100  118  121  132  139  145  132  103  98  98  114  129  124  141  154  167  172  215  164  193  216 

Repurchase Program
On November 14, 2024, the Company’s board of directors authorized a $100 million share repurchase program, which is intended to offset dilution from the Omnibus Incentive Plan. Under this authorization, the Company may, from time to time, purchase shares of its Class A Common Stock through open market transactions, privately negotiated transactions, forward, derivative, or accelerated repurchase transactions, tender offers or otherwise, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act. The $100 million share repurchase authorization does not obligate the Company to purchase any shares. We may commence such repurchases immediately, subject to compliance with applicable securities laws. We may enter into a pre-arranged stock trading plan in accordance with the guidelines specified under Rule 10b5-1 to effectuate all or a portion of the share repurchase program. We expect to finance any repurchases from a combination of cash on hand and cash provided by operating activities. The timing and method of any repurchases, which will depend on a variety of factors, including market conditions, are subject to our results of operations, financial condition, liquidity and other factors. The authorization for the share repurchase program may be suspended, terminated, increased or decreased by the board of directors at any time.
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The following table provides information about purchases made by or on behalf of the Company of the Company’s Class A common stock during the three months ended September 30, 2025:

Period Total Number of Shares Repurchased Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
July 2025
—  $ —  —  $ — 
August 2025
90,301  $ 32.51  90,301  $ 94 
September 2025
306,597  $ 32.96  306,597  $ 84 

Securities Authorized for Issuance Under Equity Compensation Plans
See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

ITEM 6.    [RESERVED]
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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Annual Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. Actual results and the timing of events could differ materially from those projected in forward-looking statements due to a number of factors, including those described under “Item 1A. Risk Factors” and elsewhere in this Annual Report. See “Special Note Regarding Forward-Looking Statements.”
You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report. Discussion of FY 2023 items and year-over-year comparisons between FY 2024 and FY 2023 can be found in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

INTRODUCTION
The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. Acquisition Corp. is one of the world’s major music entertainment companies.
The Company and Holdings are holding companies that conduct substantially all of their business operations through their subsidiaries. The terms “we,” “us,” “our,” “ours” and the “Company” refer collectively to Warner Music Group Corp. and its consolidated subsidiaries, except where otherwise indicated.
Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the consolidated financial statements and related notes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. MD&A is organized as follows:
• Business overview. This section provides a general description of our business, as well as a discussion of factors that we believe are important in understanding our results of operations and comparability and in anticipating future trends.
• Results of operations. This section provides an analysis of our results of operations for the fiscal years ended September 30, 2025 and September 30, 2024. This analysis is presented on both a consolidated and segment basis.
• Financial condition and liquidity. This section provides an analysis of our cash flows for the fiscal years ended September 30, 2025 and September 30, 2024, as well as a discussion of our financial condition and liquidity as of September 30, 2025. The discussion of our financial condition and liquidity includes recent debt financings and a summary of the key debt covenant compliance measures under our debt agreements.
• Critical accounting policies and estimates. This section identifies those accounting policies that are considered important to the Company’s results of operations and financial condition, require significant judgment and involve significant management estimates. The Company’s significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 2 to the accompanying consolidated financial statements.
Use of Adjusted OIBDA
We evaluate our operating performance based on several factors, including Adjusted OIBDA. We define Adjusted OIBDA as operating income (loss) adjusted to exclude the following items: (i) non-cash depreciation of tangible assets, (ii) non-cash amortization of intangible assets, (iii) non-cash stock-based compensation and other related expenses, (iv) gains or losses on divestitures, (v) expenses related to restructuring and transformation initiatives, which includes costs associated with the Company’s financial transformation initiative to design and implement new information technology and upgrade our finance infrastructure, and (vi) executive transition costs. Items excluded are not viewed to contribute directly to management’s evaluation of operating results. We consider Adjusted OIBDA to be an important indicator of the operational strengths and performance of our businesses. However, a limitation of the use of Adjusted OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses. Accordingly, Adjusted OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) attributable to Warner Music Group Corp. and other measures of financial performance reported in accordance with United States generally accepted accounting principles (“U.S. GAAP”). In addition, our definition of Adjusted OIBDA may differ from similarly titled measures used by other companies. A reconciliation of consolidated Adjusted OIBDA to operating income (loss) and net income (loss) attributable to Warner Music Group Corp. is provided in our “Results of Operations.”
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Use of Constant Currency
As exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of revenue and Adjusted OIBDA on a constant-currency basis in addition to reported results helps improve the ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant-currency information compares revenue and Adjusted OIBDA between periods as if exchange rates had remained constant period over period. We use revenue and Adjusted OIBDA on a constant-currency basis as one measure to evaluate our performance. We calculate constant-currency by calculating prior-year revenue and Adjusted OIBDA using current-year foreign currency exchange rates. We generally refer to such amounts calculated on a constant-currency basis as “excluding the impact of foreign currency exchange rates.” Revenue and Adjusted OIBDA on a constant-currency basis should be considered in addition to, not as a substitute for, revenue and Adjusted OIBDA reported in accordance with U.S. GAAP. Revenue and Adjusted OIBDA on a constant-currency basis, as we present it, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with U.S. GAAP.

BUSINESS OVERVIEW
We are one of the world’s leading music entertainment companies. Our renowned family of iconic record labels, including Atlantic Records, Warner Records, Elektra Records and Parlophone Records, is home to many of the world’s most popular and influential recording artists. In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 190,000 songwriters and composers, with a global collection of more than two million musical compositions. We classify our business interests into two fundamental operations: Recorded Music and Music Publishing. A brief description of each of those operations is presented below.
Components of Our Operating Results
Recorded Music Operations
Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists. We play an integral role in virtually all aspects of the recorded music value chain from discovering and developing talent to producing, distributing and selling music to marketing and promoting recording artists and their music.
In the United States, our Recorded Music business is conducted principally through our major record labels—Atlantic Records and Warner Records. Our Recorded Music business also includes Rhino Entertainment, a division that specializes in marketing our recorded music catalog through compilations, reissuances of previously released music and video titles and releasing previously unreleased material from our vault. We also conduct our Recorded Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, TenThousand Projects, Warner Classics and Warner Records Nashville.
Outside the United States, our Recorded Music business is conducted through various subsidiaries, affiliates and non-affiliated licensees. Internationally, we engage in the same activities as in the United States: discovering and signing artists and distributing, selling, marketing and promoting their music. In most cases, we also market, promote, distribute and sell the music of those recording artists for whom our domestic record labels have international rights. In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels.
Our Recorded Music business’s operations include WMX, a next generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways. This division includes a rebranded WEA commercial services and marketing network (formerly Warner-Elektra-Atlantic Corporation, or WEA Corp.), which markets, distributes and sells music and video products to retailers and wholesale distributors, and enhances relationships with fans by creating artist merchandise, which we operate, market and sell across various channels, including e-commerce, retail and through touring. Our business’s distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors; and various distribution centers and ventures operated internationally.
In addition to our music being sold in physical retail outlets, our music is also sold in physical form to online physical retailers, such as amazon.com, barnesandnoble.com and bestbuy.com, and distributed in digital form to an expanded universe of digital partners, including streaming services such as those of Amazon, Apple, Deezer, SoundCloud, Spotify, Tencent Music and YouTube, radio services such as iHeart Radio and SiriusXM and other download services.
We have integrated the marketing of digital content into all aspects of our business, including A&R and distribution. Our business development executives work closely with A&R departments to ensure that while music is being produced, digital assets are also created with all distribution channels in mind, including streaming services, social networking sites, online portals and music-centered destinations. We also work side-by-side with our online and mobile partners to test new concepts. We believe existing and
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new digital businesses will be a significant source of growth and will provide new opportunities to successfully monetize our assets and create new revenue streams. The proportion of digital revenues attributable to each distribution channel varies by region and proportions may change as the introduction of new technologies continues. As one of the world’s largest music entertainment companies, we believe we are well positioned to take advantage of growth in digital distribution and emerging technologies to maximize the value of our assets.
We have diversified our revenues beyond our traditional businesses by entering into expanded-rights deals with recording artists in order to partner with such artists in other aspects of their careers. Under these agreements, we provide services to and participate in recording artists’ activities outside the traditional recorded music business such as touring, merchandising and sponsorships. We have built and acquired artist services capabilities and platforms for marketing and distributing this broader set of music-related rights and participating more widely in the monetization of the artist brands we help create. We believe that entering into expanded-rights deals and enhancing our artist services capabilities in areas such as merchandising, VIP ticketing, fan clubs, concert promotion and management has permitted us to diversify revenue streams and capitalize on other revenue opportunities. This provides for improved long-term relationships with our recording artists and allows us to more effectively connect recording artists and fans.
Recorded Music revenues are derived from four main sources:
• Digital : the rightsholder receives revenues with respect to streaming and download services;
• Physical : the rightsholder receives revenues with respect to sales of physical products such as vinyl, CDs and DVDs;
• Artist services and expanded-rights : the rightsholder receives revenues with respect to our artist services businesses and our participation in expanded rights, including advertising, merchandising such as direct-to-consumer sales, touring, concert promotion, ticketing, sponsorship, fan clubs, artist websites, social publishing, and artist and brand management; and
• Licensing : the rightsholder receives royalties or fees for the right to use sound recordings in combination with visual images such as in films or television programs, television commercials and video games; the rightsholder also receives royalties if sound recordings are performed publicly through broadcast of music on television, radio and cable, and in public spaces such as shops, workplaces, restaurants, bars and clubs.
The principal costs associated with our Recorded Music business are as follows:
• A&R costs : the costs associated with (i) paying royalties to recording artists, producers, songwriters, other copyright holders and trade unions; (ii) signing and developing recording artists; and (iii) creating master recordings in the studio;
• Product costs : the costs to manufacture, package and distribute products to wholesale and retail distribution outlets, the royalty costs associated with distributing products of independent labels to wholesale and retail distribution outlets, as well as the costs related to our artist services business;
• Selling and marketing expenses : the costs associated with the promotion and marketing of recording artists and music, including costs to produce music videos for promotional purposes and artist tour support; and
• General and administrative expenses : the costs associated with general overhead and other administrative expenses.
Music Publishing Operations
While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders.
The operations of our Music Publishing business are conducted principally through Warner Chappell Music, our global music publishing company headquartered in Los Angeles, through various subsidiaries, affiliates, and non-affiliated licensees and sub-publishers. We own or control rights to more than two million musical compositions, including numerous pop hits, American standards, folk songs and motion picture and theatrical compositions. Assembled over decades, our award-winning catalog includes over 190,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel. Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios. We have an extensive production music catalog collectively branded as Warner Chappell Production Music.
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Music Publishing revenues are derived from five main sources:
• Digital: the rightsholder receives revenues with respect to musical compositions embodied in recordings distributed in streaming services, download services, digital performance and other digital music services;
• Performance: the rightsholder receives revenues if the musical composition is performed publicly through broadcast of music on television, radio and cable and in retail locations (e.g., bars and restaurants), live performance at a concert or other venue (e.g., arena concerts and nightclubs), and performance of music in staged theatrical productions;
• Mechanical: the rightsholder receives revenues with respect to musical compositions embodied in recordings sold in any physical format or configuration such as vinyl, CDs and DVDs;
• Synchronization: the rightsholder receives revenues for the right to use the musical composition in combination with visual images such as in films or television programs, television commercials and video games as well as from other uses such as in toys or novelty items and merchandise; and
• Other: the rightsholder receives revenues for use in sheet music and other uses.
The principal costs associated with our Music Publishing business are as follows:
• A&R costs : the costs associated with (i) paying royalties to songwriters, co-publishers and other copyright holders in connection with income generated from the uses of their works and (ii) signing and developing songwriters; and
• Selling and marketing, general overhead and other administrative expenses : the costs associated with selling and marketing, general overhead and other administrative expenses.
Recent Events and Factors Affecting Results of Operations and Comparability
2025 Restructuring Plan
On July 1, 2025, the Company announced a strategic restructuring plan (the “2025 Restructuring Plan”) designed to free up funds to invest in music and to accelerate the Company’s long-term growth. The Company expects the 2025 Restructuring Plan to generate pre-tax cost savings of approximately $300 million on an annualized run-rate basis by the end of the fiscal year 2027 and expects the majority of the cost savings under the 2025 Restructuring Plan to be accretive to Adjusted OIBDA. The Plan is expected to be fully implemented by the end of calendar year 2026. The Company expects to incur total charges of approximately $200 million on a pre-tax basis or approximately $150 million on an after-tax basis. Approximately $170 million of the charges will be for severance payments and other related termination costs and approximately $30 million of certain other charges. The Company anticipates that the Plan will result in cash expenditures of approximately $200 million of which $170 million is expected to be paid by the end of fiscal year 2026.
For the fiscal year ended September 30, 2025, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $90 million, of which $74 million of expense was recognized in our Recorded Music segment, $5 million was recorded in our Music Publishing segment, and $11 million was recognized in Corporate. Additionally, for the fiscal year ended September 30, 2025, the Company recognized $28 million of impairment losses, of which $6 million of expense was recognized in our Recorded Music segment and $22 million was recognized in Corporate. Impairment charges recognized primarily relate to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets.

2024 Strategic Restructuring Plan
In 2024, the Company announced a strategic restructuring plan (the “2024 Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade. The 2024 Strategic Restructuring Plan is substantially complete and the remaining associated cash payments are expected to be made by the end of fiscal year 2026.
The cost savings under the 2024 Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of non-core operations, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformative initiative. The Company expects allocating a majority of the costs savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities.
For the fiscal year ended September 30, 2025, total severance and other termination costs recorded in connection with the 2024 Strategic Restructuring Plan were $6 million, of which $8 million of expense was recognized in our Recorded Music segment while there was an $2 million benefit recognized in Corporate due to a change in estimate. Additionally, for the fiscal year ended September 30, 2025, the Company recognized $32 million of impairment losses, all of which were recognized in our Recorded Music
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segment. Impairment charges recognized primarily relate to the write-off of certain long-form audiovisual production assets and impairments of operating lease right-of-use assets that are no longer in use.
As of September 30, 2025, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $216 million with $206 million of costs recognized in our Recorded Music segment and $10 million recognized at Corporate. These costs are composed of $134 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges.
Other Impairments
For the fiscal year ended September 30, 2025, the Company recognized an impairment of $79 million within the Recorded Music segment for long-lived assets associated with EMP Merchandising (“EMP”) which is now classified as held for sale as of September 30, 2025.

BMG Termination
In September 2023, the Company terminated its distribution agreement with BMG as BMG began to bring digital distribution in-house and license directly with digital service partners in fiscal 2024 while also licensing its physical distribution with a different provider (the “BMG Termination”). ADA, which is part of our Recorded Music business, had previously been distributing BMG’s recorded music catalog and revenues are reported within our Recorded Music segment. The shift to digital direct deals by BMG was a phased in-sourcing of distribution during the current fiscal year and we rolled off BMG, including its physical distribution, at the end of the current fiscal year.
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RESULTS OF OPERATIONS
Fiscal Year Ended September 30, 2025 Compared with Fiscal Year Ended September 30, 2024
Consolidated Results
Revenues
The Company’s revenues were composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
Revenue by Type
Digital $ 3,594  $ 3,519  $ 75  2  %
Physical 527  519  8  2  %
Total Digital and Physical 4,121  4,038  83  2  %
Artist services and expanded-rights 835  684  151  22  %
Licensing 452  501  (49) -10  %
Total Recorded Music 5,408  5,223  185  4  %
Performance 228  198  30  15  %
Digital 800  763  37  5  %
Mechanical 63  58  5  9  %
Synchronization 197  175  22  13  %
Other 18  16  2  13  %
Total Music Publishing 1,306  1,210  96  8  %
Intersegment eliminations (7) (7) —  —  %
Total Revenues $ 6,707  $ 6,426  $ 281  4  %
Revenue by Geographical Location
U.S. Recorded Music $ 2,181  $ 2,210  $ (29) -1  %
U.S. Music Publishing 693  660  33  5  %
Total U.S. 2,874  2,870  4  —  %
International Recorded Music 3,227  3,013  214  7  %
International Music Publishing 613  550  63  11  %
Total International 3,840  3,563  277  8  %
Intersegment eliminations (7) (7) —  —  %
Total Revenues $ 6,707  $ 6,426  $ 281  4  %

Total Revenues
Total revenues increased by $281 million, or 4%, to $6,707 million for the fiscal year ended September 30, 2025 from $6,426 million for the fiscal year ended September 30, 2024. Revenue growth was favorably impacted by the settlement of certain infringement cases (the “Copyright Settlement”) which resulted in $16 million higher Recorded Music revenue and $4 million of incremental Recorded Music streaming revenue recognized from a Digital Service Provider (“DSP”) for performance obligations satisfied in previous periods (the “DSP True-Up Payments”). The prior year included $75 million of Recorded Music licensing revenue from a licensing agreement extension for an artist’s catalog (the “Licensing Extension”), $43 million of incremental Recorded Music streaming revenue recognized from the DSP True-Up Payments, and $30 million of Recorded Music streaming revenue from a deal with one of the Company’s digital partners (the “Digital License Renewal”), which resulted in upfront revenue recognition for the fiscal year ended September 30, 2024. In addition, revenue growth was unfavorably impacted by the BMG Termination, which resulted in $81 million of lower Recorded Music revenue compared to the prior year, of which $34 million was in streaming revenue and $47 million was in physical revenue. Adjusted for these items, total revenues increased by 8%, which includes $7 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 81% and 19% of total revenues for each of the fiscal years ended September 30, 2025 and September 30, 2024, respectively. Prior to intersegment eliminations, U.S. and international revenues represented 43% and 57% of total revenues for the fiscal year ended September 30, 2025, respectively. In the prior year, U.S. and international revenues represented 45% and 55% of total revenues prior to intersegment eliminations, respectively.
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Total digital revenues after intersegment eliminations increased by $113 million, or 3%, to $4,393 million for the fiscal year ended September 30, 2025 from $4,280 million for the fiscal year ended September 30, 2024. Total streaming revenue increased by 2% driven by growth across Recorded Music and Music Publishing, including growth in subscription streaming revenue. Total digital revenues represented 65% of consolidated revenues for the fiscal year ended September 30, 2025, from 67% for the fiscal year ended September 30, 2024. Prior to intersegment eliminations, total digital revenues for the fiscal year ended September 30, 2025 were composed of U.S. revenues of $2,048 million and international revenues of $2,346 million, or 47% and 53% of total digital revenues, respectively. Prior to intersegment eliminations, total digital revenues for the fiscal year ended September 30, 2024 were composed of U.S. revenues of $2,039 million and international revenues of $2,243 million, or 48% and 52% of total digital revenues, respectively.
Recorded Music revenues increased by $185 million, or 4%, to $5,408 million for the fiscal year ended September 30, 2025 from $5,223 million for the fiscal year ended September 30, 2024. The increase includes $6 million of favorable currency exchange fluctuations. U.S. Recorded Music revenues were $2,181 million and $2,210 million, or 40% and 42% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively. International Recorded Music revenues were $3,227 million and $3,013 million, or 60% and 58% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, and physical revenues, partially offset by a decrease in licensing revenue. Digital revenue increased by $75 million, or 2%, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription streaming revenue. Revenue from streaming services increased by $61 million, or 2%, to $3,505 million for the fiscal year ended September 30, 2025 from $3,444 million for the fiscal year ended September 30, 2024. Adjusted for the impact of the DSP True-Up Payments in the current and prior years and the BMG Termination and the Digital License Renewal in the prior year, Recorded Music streaming revenue grew by 5%. Download and other digital revenues increased by $14 million, or 19%, to $89 million for the fiscal year ended September 30, 2025 from $75 million for the fiscal year ended September 30, 2024, which includes the favorable impact of the Copyright Settlement of $16 million compared to the prior year. Artist services and expanded-rights revenue increased by $151 million primarily due to higher merchandising revenue of $69 million, which includes a favorable impact from the Company’s partnership with Oasis, the impact of acquisitions of $66 million, and higher concert promotion revenue of $49 million. Physical revenue increased by $8 million, or 2%, which includes a favorable impact of foreign currency exchange rates of $5 million. Licensing revenue decreased by $49 million, or 10%, driven by $75 million from the Licensing Extension in the prior year. Top sellers for the current year included ROSÉ, Bruno Mars, Linkin Park, Teddy Swims, Benson Boone and Charli XCX.
Music Publishing revenues increased by $96 million, or 8%, to $1,306 million for the fiscal year ended September 30, 2025 from $1,210 million for the fiscal year ended September 30, 2024. U.S. Music Publishing revenues were $693 million and $660 million, or 53% and 55% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively. International Music Publishing revenues were $613 million and $550 million, or 47% and 45% of Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
The overall increase in Music Publishing revenue was driven by increases in digital revenue of $37 million, or 5%, performance revenue of $30 million, or 15%, synchronization revenue of $22 million, or 13%, and mechanical revenue of $5 million, or 9%. The increase in digital revenue is primarily due to continued growth in streaming revenue. Revenue from streaming services increased by $39 million, or 5%, to $791 million for the fiscal year ended September 30, 2025 from $752 million for the fiscal year ended September 30, 2024. Performance revenue increased due to growth from concerts, radio, live and non-live events, and the timing of payments from collection societies in the United States. Synchronization revenue increased driven by the timing of other copyright infringement settlements primarily in the United States and the $8 million impact of our acquisition of Tempo Music. Mechanical revenue increased, driven by the timing of distributions.
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Revenue by Geographical Location
U.S. revenue remained constant for the fiscal year ended September 30, 2025 compared to the fiscal year ended September 30, 2024. U.S. Recorded Music revenue decreased by $29 million, or 1%, primarily driven by a decrease in licensing revenue of $70 million largely attributable to $75 million from the Licensing Extension in the prior year, partially offset by higher U.S. Recorded Music artist services and expanded-rights revenue driven by the impact of our acquisitions of $38 million. U.S. Recorded Music digital revenue remained constant for the fiscal year ended September 30, 2025 compared to the prior year driven by an increase in download and other digital revenue of $15 million, offset by a decrease in U.S. Recorded Music streaming revenue of $12 million. The increase in download and other digital revenue is largely due to the impact of the Copyright Settlement of $16 million in the current year. The decrease in streaming revenue is primarily due to the impact of the DSP True-Up Payments of $23 million and the BMG Termination of $23 million in the prior year. Adjusted for the impact of these events, streaming revenue increased due to continued growth in subscription services. U.S. Music Publishing revenue increased by $33 million, or 5%, to $693 million for the fiscal year ended September 30, 2025 from $660 million for the fiscal year ended September 30, 2024. U.S. Music Publishing digital revenue increased by $6 million, or 1%, attributable to continued growth in streaming revenue, which increased by $6 million, or 1%. U.S. Music Publishing synchronization revenue increased by $21 million, primarily driven by an increase in other copyright infringement settlements and the acquisition of Tempo Music of $8 million. U.S. Music Publishing performance revenue increased by $6 million, or 8% due to the timing of payments. U.S. Music Publishing mechanical revenue increased by $2 million, or 17% driven by the timing of distributions.
International revenue increased by $277 million, or 8%, to $3,840 million for the fiscal year ended September 30, 2025 from $3,563 million for the fiscal year ended September 30, 2024. Excluding the favorable impact of foreign currency exchange rates of $5 million, international revenue increased by $272 million, or 8%. International Recorded Music revenue increased by $214 million, or 7%, primarily due to increases in digital revenue of $72 million, artist services and expanded-rights revenue of $112 million, licensing revenue of $21 million, and physical revenue of $9 million. International Recorded Music digital revenue increased largely due to an increase in streaming revenue of $73 million, or 4%, which includes the impact of the DSP True-Up Payments of $4 million in the current year, as well as the Digital Licensing Renewal of $30 million, the DSP True-Up Payments of $20 million and the BMG Termination of $11 million in the prior year. Adjusted for the impact of these events, streaming revenue increased due to continued growth in streaming services. Download and other digital revenues decreased by $1 million due to the continued shift to streaming services. International Recorded Music artist services and expanded-rights revenue increased by $112 million primarily due to higher concert promotion revenue of $49 million and higher merchandising revenue of $39 million, which includes a favorable impact from the Company’s partnership with Oasis, and a favorable impact of foreign currency exchange rates of $4 million. International Recorded Music licensing revenue increased by $21 million, driven by higher licensing activity primarily in Europe and Japan and the favorable impact of foreign currency exchange rates of $3 million. International Recorded Music physical revenue increased by $9 million, driven by strength of new releases primarily in Asia, and a favorable impact of foreign currency exchange rates of $5 million. International Music Publishing revenue increased by $63 million, or 11%, to $613 million for the fiscal year ended September 30, 2025, from $550 million for the fiscal year ended September 30, 2024. This was primarily driven by increases in digital revenue of $31 million, performance revenue of $24 million, synchronization revenue of $1 million, mechanical revenue of $3 million and other publishing revenue of $4 million. International Music Publishing streaming revenue increased by $33 million, or 11%, reflecting continued market growth. Performance revenue increased by $24 million or 19% driven by higher touring revenue primarily in Europe and Latin America.
Cost of revenues
Our cost of revenues was composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
Artist and repertoire costs $ 2,342  $ 2,167  $ 175  8  %
Product costs 1,290  1,188  102  9  %
Total cost of revenues $ 3,632  $ 3,355  $ 277  8  %

Our cost of revenues increased by $277 million, or 8%, to $3,632 million for the fiscal year ended September 30, 2025 from $3,355 million for the fiscal year ended September 30, 2024. Expressed as a percentage of revenues, cost of revenues increased to 54% for the fiscal year ended September 30, 2025 from 52% for the fiscal year ended September 30, 2024.
Artist and repertoire costs increased by $175 million, to $2,342 million for the fiscal year ended September 30, 2025 from $2,167 million for the fiscal year ended September 30, 2024. Artist and repertoire costs as a percentage of revenue increased to 35% for the fiscal year ended September 30, 2025, from 34% for the fiscal year ended September 30, 2024, primarily due to revenue mix.
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Product costs increased by $102 million, to $1,290 million for the fiscal year ended September 30, 2025 from $1,188 million for the fiscal year ended September 30, 2024. Product costs as a percentage of revenue increased to 19% for the fiscal year ended September 30, 2025 from 18% for the fiscal year ended September 30, 2024 due to revenue mix from higher artist services and expanded-rights and merchandise revenue and the impact of the Licensing Extension, partially offset by the impact of the BMG Termination.
Selling, general and administrative expenses
Our selling, general and administrative expenses were composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
General and administrative expense (1) $ 1,135  $ 1,089  $ 46  4  %
Selling and marketing expense 642  685  (43) -6  %
Distribution expense 112  105  7  7  %
Total selling, general and administrative expense
$ 1,889  $ 1,879  $ 10  1  %

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

Total selling, general and administrative expense increased by $10 million, or 1%, to $1,889 million for the fiscal year ended September 30, 2025 from $1,879 million for the fiscal year ended September 30, 2024. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 28% for the fiscal year ended September 30, 2025 from 29% for the fiscal year ended September 30, 2024.
General and administrative expense increased by $46 million to $1,135 million for the fiscal year ended September 30, 2025 from $1,089 million for the fiscal year ended September 30, 2024. The increase in general and administrative expense was driven by incremental investment in technology of $21 million, higher depreciation expense of $15 million related to technology assets being placed into service, including the core financials component of our new technology platform, the impact of acquisitions of approximately $9 million, and higher executive transition costs of $8 million in the current year, partially offset by savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business. Expressed as a percentage of revenue, general and administrative expense remained constant at 17% for each of the fiscal years ended September 30, 2025 and September 30, 2024.
Selling and marketing expense decreased by $43 million, or 6%, to $642 million for the fiscal year ended September 30, 2025 from $685 million for the fiscal year ended September 30, 2024. Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the fiscal year ended September 30, 2025 from 11% for the fiscal year ended September 30, 2024 due to lower variable marketing spend and savings from the Company’s restructuring plans.
Distribution expense increased by $7 million, to $112 million for the fiscal year ended September 30, 2025 from $105 million for the fiscal year ended September 30, 2024 driven by revenue mix due to higher artist services and expanded-rights and concert promotion revenue. Expressed as a percentage of revenue, distribution expense remained constant at 2% for each of the fiscal years ended September 30, 2025 and September 30, 2024.
Restructuring and Impairments
For the fiscal year ended September 30, 2025, total restructuring and impairment costs were $234 million consisting of approximately $95 million of restructuring charges and approximately $139 million of non-cash impairment losses. Impairment charges include a $79 million impairment charge on long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025 and $60 million of charges recognized in connection with the Company’s restructuring plans primarily related to the write-off of certain long-form audiovisual production assets, impairments of operating lease right-of-use assets that are no longer in use and write-offs of artist advances.
Net gain on divestitures
There was no net gain on divestitures during the fiscal year ended September 30, 2025. During the fiscal year ended September 30, 2024, the Company recorded a pre-tax gain of $32 million in connection with the divestiture of certain sound recording and publishing rights.
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Reconciliation of Net Income Attributable to Warner Music Group Corp. and Operating Income to Consolidated Adjusted OIBDA
As previously described, we use Adjusted OIBDA as one of our measures to evaluate our operating performance. The following table reconciles operating income to Adjusted OIBDA, and further provides the components from net income attributable to Warner Music Group Corp. to operating income for purposes of the discussion that follows (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
Net income attributable to Warner Music Group Corp. $ 365  $ 435  $ (70) -16  %
Income attributable to noncontrolling interest 5  43  (38) -88  %
Net income 370  478  (108) -23  %
Income tax expense 120  123  (3) -2  %
Income before income taxes 490  601  (111) -18  %
Other expense (income) 42  61  (19) -31  %
Interest expense, net 162  161  1  1  %

Operating income 694  823  (129) -16  %
Amortization expense 258  224  34  15  %
Depreciation expense 118  103  15  15  %
Restructuring and impairments 234  177  57  32  %
Transformation initiative costs
70  76  (6) -8  %
Executive transition costs 8  —  8  —  %
Net gain on divestitures —  (32) 32  -100  %
Non-cash stock-based compensation and other related costs 61  61  —  —  %
Adjusted OIBDA
$ 1,443  $ 1,432  $ 11  1  %

Adjusted OIBDA
Adjusted OIBDA increased by $11 million to $1,443 million for the fiscal year ended September 30, 2025, from $1,432 million for the fiscal year ended September 30, 2024, largely attributable to the impact of the Copyright Settlement of $9 million and the DSP True-Up Payments of $3 million in the current year, offset by the Licensing Extension of $74 million, the DSP True-Up Payments of $23 million, the Digital License Renewal of $12 million and the BMG Termination of $2 million in the prior year, as well as savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, and favorable movements in currency exchange rates. Expressed as a percentage of total revenue, Adjusted OIBDA margin remained constant at 22% for each of the fiscal years ended September 30, 2025 and September 30, 2024.
Non-cash stock-based compensation and other related costs
Our non-cash stock-based compensation and other related costs remained constant at $61 million for each of the fiscal years ended September 30, 2025 and September 30, 2024, primarily related to the issuance of restricted stock units and market-based performance stock units and the acceleration of expense related to awards associated with certain employees that were terminated under our restructuring plans. Additionally, the current year includes $5 million of non-cash stock-based compensation expense related to the departure of our former CFO.
Net gain on divestitures
There was no net gain on divestitures during the fiscal year ended September 30, 2025. During the fiscal year ended September 30, 2024, the Company recognized a pre-tax gain of $32 million in connection with the divestitures of certain sound recording and publishing rights.
Executive transition costs
Executive transition costs were $8 million during the fiscal year ended September 30, 2025, which consisted of severance costs associated with the departure of our former CFO and other certain executives in the current year.
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Transformation initiative costs
Our transformation initiative costs decreased by $6 million to $70 million for the fiscal year ended September 30, 2025 from $76 million for the fiscal year ended September 30, 2024 due to a decrease in costs associated with our finance transformation as assets are placed into service.
Restructuring and Impairments
Our restructuring and impairment charges increased $57 million to $234 million for the fiscal year ended September 30, 2025, from $177 million for the fiscal year ended September 30, 2024. The increase is primarily driven by an increase in non-cash impairment charges of $89 million driven by an impairment charge of $79 million on long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025 and higher impairments recognized in connection with the Company’s restructuring plans. This is partially offset by lower restructuring costs of $32 million attributable to the Company’s restructuring plans.
Depreciation expense
Our depreciation expense increased by $15 million to $118 million for the fiscal year ended September 30, 2025 from $103 million for the fiscal year ended September 30, 2024. This increase is primarily due to an increase in technology assets being placed into service, including the core financials component of our new technology platform.
Amortization expense
Our amortization expense increased by $34 million, or 15%, to $258 million for the fiscal year ended September 30, 2025 from $224 million for the fiscal year ended September 30, 2024. The increase is driven by incremental amortization related to acquisitions of music-related assets.
Operating income
Our operating income decreased by $129 million to $694 million for the fiscal year ended September 30, 2025 from $823 million for the fiscal year ended September 30, 2024. The decrease in operating income was due to revenue mix, higher restructuring and non-cash impairment charges, higher depreciation and amortization expense and a decrease in net gain on divestitures, partially offset by factors that led to the increase in Adjusted OIBDA noted above.
Interest expense, net
Our interest expense, net, increased by $1 million to $162 million for the fiscal year ended September 30, 2025 from $161 million for the fiscal year ended September 30, 2024 due to incremental debt related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo Music, partially offset by lower interest rates on variable rate debt.
Other expense (income)
Other expense for the fiscal year ended September 30, 2025 primarily includes foreign currency losses on our Euro-denominated debt of $43 million, and currency exchange losses on our intercompany loans of $32 million, partially offset by income earned on equity method investments of $8 million.
Other expense for the fiscal year ended September 30, 2024 primarily includes foreign currency losses on our Euro-denominated debt of $47 million, and currency exchange losses on our intercompany loans of $26 million, partially offset by income earned on equity method investments of $8 million.
Income tax expense
Our income tax expense decreased by $3 million to $120 million for the fiscal year ended September 30, 2025 from $123 million for the fiscal year ended September 30, 2024. The decrease of $3 million in income tax expense is primarily due to the decrease in pre-tax income and benefit from the change in indefinite reinvestment assertion related to EMP, partially offset by benefits in the prior year from the winding down of the Company’s owned and operated media properties, updated allowable costs for reported foreign derived intangible income, and nontaxable income from partnerships.
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Net income
Net income decreased by $108 million to $370 million for the fiscal year ended September 30, 2025 from $478 million for the fiscal year ended September 30, 2024 as a result of the factors described above.
Noncontrolling interest
There was $5 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2025, a decrease of $38 million, from $43 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2024, primarily driven by the impact of the Licensing Extension in the prior year, partially offset by higher income from non-wholly-owned subsidiaries in the current year.
Business Segment Results
Revenues, operating income (loss) and Adjusted OIBDA by business segment were as follows (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
Recorded Music
Revenues $ 5,408  $ 5,223  $ 185  4  %
Operating income 850  916  (66) -7  %
Adjusted OIBDA
1,269  1,282  (13) -1  %
Music Publishing
Revenues 1,306  1,210  96  8  %
Operating income 224  238  (14) -6  %
Adjusted OIBDA
361  330  31  9  %
Corporate expenses and eliminations
Revenue eliminations (7) (7) —  —  %
Operating loss (380) (331) (49) 15  %
Adjusted OIBDA loss
(187) (180) (7) 4  %
Total
Revenues 6,707  6,426  281  4  %
Operating income 694  823  (129) -16  %
Adjusted OIBDA
1,443  1,432  11  1  %

Recorded Music
Revenues
Recorded Music revenue increased by $185 million to $5,408 million for the fiscal year ended September 30, 2025 from $5,223 million for the fiscal year ended September 30, 2024. U.S. Recorded Music revenues were $2,181 million and $2,210 million, or 40% and 42% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively. International Recorded Music revenues were $3,227 million and $3,013 million, or 60% and 58% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights and physical revenues, partially offset by lower licensing revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
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Cost of revenues
Recorded Music cost of revenues was composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
Artist and repertoire costs $ 1,528  $ 1,411  $ 117  8  %
Product costs 1,290  1,188  102  9  %
Total cost of revenues $ 2,818  $ 2,599  $ 219  8  %

Recorded Music cost of revenues increased by $219 million, or 8%, to $2,818 million for the fiscal year ended September 30, 2025 from $2,599 million for the fiscal year ended September 30, 2024. Expressed as a percentage of Recorded Music revenue, cost of revenues increased to 52% for the fiscal year ended September 30, 2025 from 50% for the fiscal year ended September 30, 2024.
Artist and repertoire costs as a percentage of revenue increased to 28% for the fiscal year ended September 30, 2025 from 27% for the fiscal year ended September 30, 2024 primarily driven by revenue mix.
Product costs as a percentage of revenue increased to 24% for the fiscal year ended September 30, 2025 from 23% for the fiscal year ended September 30, 2024. The overall increase as a percentage of revenue is primarily due to revenue and deal mix from higher artist services and expanded-rights revenue.
Selling, general and administrative expenses
Recorded Music selling, general and administrative expenses were composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
General and administrative expense (1) $ 679  $ 664  $ 15  2  %
Selling and marketing expense 615  663  (48) -7  %
Distribution expense 112  105  7  7  %
Total selling, general and administrative expenses
$ 1,406  $ 1,432  $ (26) -2  %

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

Recorded Music selling, general and administrative expense decreased by $26 million, or 2%, to $1,406 million for the fiscal year ended September 30, 2025 from $1,432 million for the fiscal year ended September 30, 2024. General and administrative expenses increased by $15 million, primarily due to the impact of acquisitions of approximately $8 million, partially offset by lower non-cash stock-based compensation and other related expenses of $10 million and savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business. The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the Company’s restructuring plans. The decrease in distribution expense was primarily due to revenue mix. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 26% for the fiscal year ended September 30, 2025 from 27% for the fiscal year ended September 30, 2024.
Operating income and Adjusted OIBDA
Recorded Music operating income decreased by $66 million to $850 million for the fiscal year ended September 30, 2025 from $916 million for the fiscal year ended September 30, 2024 due to the factors that led to the decrease in Recorded Music Adjusted OIBDA noted below, as well as higher restructuring and non-cash impairment charges in the current year of $32 million, which is driven by $79 million of impairment charges recognized for long-lived assets associated with EMP, which is now classified as held for sale as of September 30, 2025, partially offset by lower restructuring and impairment charges in connection with the Company’s restructuring plans, higher non-cash stock-based compensation expense and other related costs of $10 million and higher amortization expense of $9 million, partially offset by a $17 million year-over-year decrease in net gain on divestitures.
Recorded Music Adjusted OIBDA decreased by $13 million, to $1,269 million for the fiscal year ended September 30, 2025 from $1,282 million for the fiscal year ended September 30, 2024. The decrease in Adjusted OIBDA is largely attributable to the
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Copyright Settlement of $9 million and DSP True-Up Payments of $3 million in the current year, partially offset by the Licensing Extension of $74 million, DSP True-Up Payments of $23 million, the Digital License Renewal of $12 million, and the $2 million impact of the BMG Termination in the prior year, as well as savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, and the impact of favorable movements in foreign currency exchange rates. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin decreased to 23% for the fiscal year ended September 30, 2025 from 25% for the fiscal year ended September 30, 2024, due to the factors noted above.
Music Publishing
Revenues
Music Publishing revenues increased by $96 million, or 8%, to $1,306 million for the fiscal year ended September 30, 2025 from $1,210 million for the fiscal year ended September 30, 2024. U.S. Music Publishing revenues were $693 million and $660 million, or 53% and 55% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively. International Music Publishing revenues were $613 million and $550 million, or 47% and 45% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
The overall increase in Music Publishing revenue was driven by growth in digital, performance, synchronization and mechanical revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Music Publishing cost of revenues was composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
Artist and repertoire costs $ 821  $ 763  $ 58  8  %
Total cost of revenues $ 821  $ 763  $ 58  8  %

Music Publishing cost of revenues increased by $58 million, or 8%, to $821 million for the fiscal year ended September 30, 2025 from $763 million for the fiscal year ended September 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the fiscal years ended September 30, 2025 and September 30, 2024.
Selling, general and administrative expense
Music Publishing selling, general and administrative expenses were composed of the following amounts (in millions):

For the Fiscal Year Ended
September 30, 2025 vs. 2024
2025 2024 $ Change % Change
General and administrative expense (1) $ 131  $ 123  $ 8  7  %
Selling and marketing expense 3  2  1  50  %
Total selling, general and administrative expense
$ 134  $ 125  $ 9  7  %

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

Music Publishing selling, general and administrative expense increased by $9 million to $134 million for the fiscal year ended September 30, 2025 from $125 million for the fiscal year ended September 30, 2024. The increase was primarily due to higher compensation and employee-related costs and an increase in selling and marketing expense from higher variable marketing spend. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for each of the fiscal years ended September 30, 2025 and September 30, 2024.
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Operating income and Adjusted OIBDA
Music Publishing operating income decreased by $14 million to $224 million for the fiscal year ended September 30, 2025 from $238 million for the fiscal year ended September 30, 2024 largely due to the factors affecting Adjusted OIBDA discussed below, partially offset by higher amortization expense of $24 million and a $14 million net gain on a divestiture recognized in the prior year.
Music Publishing Adjusted OIBDA increased by $31 million, or 9%, to $361 million for the fiscal year ended September 30, 2025 from $330 million for the fiscal year ended September 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 28% for the fiscal year ended September 30, 2025 from 27% in the fiscal year ended September 30, 2024, primarily driven by revenue mix, partially offset by $5 million of restructuring and non-cash impairment charges in the current year.
Corporate Expenses and Eliminations
Our operating loss from corporate expenses and eliminations increased by $49 million to $380 million for the fiscal year ended September 30, 2025 from $331 million for the fiscal year ended September 30, 2024. The increase is primarily due to an increase in restructuring and non-cash impairment charges associated with the Company’s restructuring plans of $20 million, an increase in depreciation of $13 million, higher non-cash stock-based compensation and other related costs of $9 million and executive transition costs of $4 million, partially offset by a decrease in finance transformation costs of $6 million.
Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $7 million to $187 million for the fiscal year ended September 30, 2025 from $180 million for the fiscal year ended September 30, 2024 primarily due to the operating loss factors noted above.
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FINANCIAL CONDITION AND LIQUIDITY
Financial Condition at September 30, 2025
At September 30, 2025, we had $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, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $647 million of Warner Music Group Corp. equity. This compares to $4.014 billion of debt (which is net of $34 million of premiums, discounts and deferred financing costs), $694 million of cash and equivalents (net debt of $3.320 billion) and $518 million of Warner Music Group Corp. equity at September 30, 2024.
Cash Flows
The following table summarizes our historical cash flows (in millions). The financial data for the fiscal years ended September 30, 2025 and September 30, 2024 have been derived from our consolidated financial statements included elsewhere herein.

Fiscal Year Ended September 30,
2025 2024
Cash provided by (used in):
Operating activities $ 678  $ 754 
Investing activities (340) (311)
Financing activities (497) (396)

Operating Activities
Cash provided by operating activities was $678 million for the fiscal year ended September 30, 2025 compared to $754 million for the fiscal year ended September 30, 2024. The $76 million, or 10%, decrease in cash provided by operating activities during the current year was primarily due to timing of working capital, increased royalty payments to artists, and severance payments related to the 2024 Strategic Restructuring Plan, partially offset by higher cash receipts from digital service providers.
Investing Activities
Cash used in investing activities was $340 million for the fiscal year ended September 30, 2025 compared to $311 million for the fiscal year ended September 30, 2024.
Cash used in investing activities of $340 million for the fiscal year ended September 30, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $195 million to acquire music-related assets, and $139 million relating to capital expenditures, partially offset by $40 million of proceeds from the sale of investments.
Cash used in investing activities of $311 million for the fiscal year ended September 30, 2024 consisted of $40 million relating to investments and acquisitions of businesses, $187 million to acquire music-related assets, and $116 million relating to capital expenditures, partially offset by $19 million of proceeds from divestitures and $13 million of proceeds from the sale of investments.
Financing Activities
Cash used in financing activities was $497 million for the fiscal year ended September 30, 2025 compared to cash used in financing activities of $396 million for the fiscal year ended September 30, 2024.
The $497 million of cash used in financing activities for the fiscal year ended September 30, 2025 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $23 million, dividends paid of $383 million, deferred financing costs of $2 million, distributions to noncontrolling interest holders of $15 million, taxes paid to net share settle restricted stock units and Class A common shares of $20 million, common stock repurchased and retired of $16 million, redemption of noncontrolling interests of $37 million, and repayment of the Term Loan Mortgage of $1 million.
The $396 million of cash used in financing activities for the fiscal year ended September 30, 2024 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $20 million, dividends paid of $361 million, deferred financing costs of $2 million, distributions to noncontrolling interest holders of $8 million, and taxes paid to net share settle restricted stock units and Class A common shares of $5 million.
There were no drawdowns on the Revolving Credit Facility or Beethoven Credit Agreement (as defined below) during the fiscal years ended September 30, 2025 and September 30, 2024.
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Liquidity
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. 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.
We believe that our primary sources of liquidity will be sufficient to support our existing operations over the next twelve months.
Debt Capital Structure
Since Access acquired us in 2011, we have sought to extend the maturity dates on our outstanding indebtedness, reduce interest expense and improve our debt ratings. For example, our S&P corporate credit rating improved from B in 2017 to BBB- in August 2024 with a stable outlook, and our Moody’s corporate family rating improved from B1 in 2016 to Ba1 in March 2025 with a positive outlook update. 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 4.1% as of September 30, 2025. Our nearest-term maturity date is in 2028. Subject to market conditions, we expect to continue to take opportunistic steps to extend our maturity dates and reduce related interest expense. From time to time, we may incur additional indebtedness for, among other things, working capital, repurchasing, redeeming or tendering for existing indebtedness and acquisitions or other strategic transactions.
Tempo Asset-Based Notes
Following its acquisition of Tempo Music on February 5, 2025, the Company holds approximately $311 million of asset-based securities due November 2050 (“Asset-Based Notes”) issued by a subsidiary of Tempo Music and secured only by certain music rights owned by Tempo Music and is nonrecourse to the Company and its subsidiaries, other than Tempo Music. These notes, which consist of multiple fixed rate tranches, will accrue at a fixed weighted average rate of 4.62% until the estimated term of November 30, 2027, with higher interest rates thereafter if the notes are not refinanced by then. Pursuant to the indenture governing the Asset-Based Notes, the outstanding Asset-Based Notes may be redeemed in whole or in part at any time upon providing notice to the trustee and paying agent. Principal and interest are payable in equal semi-annual installments.
Beethoven Credit Agreement
On June 29, 2025, the Company, through its wholly owned indirect subsidiary, WMG BC Holdco LLC, entered into a joint venture agreement (the “JV Agreement”) with BCSS W JV Investments (B), L.P. (“BainCo”), a Delaware limited partnership and wholly owned indirect subsidiary of Bain Capital Special Situations, LP, pursuant to which the Company and BainCo will operate Beethoven JV 1, LLC, a Delaware limited liability company.
In connection with the JV Agreement, on the same date, Beethoven Financing 1, LLC, a Delaware limited liability company and an indirect subsidiary of the Company, as borrower (the “Initial Borrower”), the additional borrowers that may from time to time become party thereto (together with the Initial Borrower, the “Borrowers”), Beethoven Holdings 1, LLC, a Delaware limited liability company, as guarantor (the “Initial Guarantor”), the additional guarantors from time to time party thereto (together with the Initial Guarantor, the “Guarantors”), each of the commercial paper conduits from time to time party thereto (the “Conduit Lenders”), each of the financial institutions from time to time party thereto as committed lenders (the “Committed Lenders” and, together with the Conduit Lenders, the “Lenders”), the conduit managing agents from time to time party thereto, The Bank of New York Mellon, as administrative agent for the Lenders and as collateral agent for the Secured Parties (in each case, as defined in the Beethoven Credit Agreement), entered into a Credit and Security Agreement (the “Beethoven Credit Agreement”) pursuant to which the Lenders have agreed to extend up to $500 million in commitment amounts to the Borrowers (the “Beethoven Credit Facility”). The obligations of the Borrowers under the Beethoven Credit Agreement will be (a) secured by the Borrowers with a first priority security interest in all of their respective assets and (b) guaranteed by the Guarantors with a first priority security interest in all of their respective assets.
The Beethoven Credit Agreement contains affirmative and negative covenants for this type of facility, and the ability, subject to the consent of the Lenders, to increase the size of the facility to $700 million.
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Term Loan Mortgage Agreement
On January 27, 2023, Acquisition Corp., along with Warner Records Inc. and Warner Music Inc., entered into an agreement with Truist Bank, which provides for a term loan of $19 million (“Term Loan Mortgage”) secured by the Company’s real estate properties in Nashville, Tennessee. Interest on the Term Loan Mortgage will accrue at a rate of 30-day Secured Overnight Financing Rate (“SOFR”) plus the applicable margin of 1.40% subject to a zero floor. Equal principal installments and interest are due monthly. The outstanding balance for the Term Loan Mortgage as of September 30, 2025 was $17 million.
Revolving Credit Facility
On January 31, 2018, Acquisition Corp. entered into the revolving credit agreement (as amended by the amendment dated October 9, 2019 and as further amended, amended and restated or otherwise modified from time to time, the “Revolving Credit Agreement”) for a senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the “Revolving Credit Facility”). On April 3, 2020, Acquisition Corp. entered into an amendment to the Revolving Credit Agreement (the “Second Amendment”) which, among other things, increased the commitments under the Revolving Credit Facility from an aggregate principal amount of $180 million to an aggregate principal amount of $300 million and extended the final maturity of the Revolving Credit Facility from January 31, 2023 to April 3, 2025.
On March 1, 2021, Acquisition Corp. entered into an amendment (the “Revolving Credit Agreement Amendment”) to the Revolving Credit Agreement among Acquisition Corp., the several banks and other financial institutions party thereto and Credit Suisse AG, as administrative agent, governing Acquisition Corp.’s revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Revolving Credit Agreement Amendment (among other changes) adds certain exceptions and increases the leverage ratio below which Acquisition Corp. can access certain baskets in connection with Acquisition Corp.’s negative covenants, including those related to incurrence of indebtedness, restricted payments and covenant suspension.
On March 23, 2023, Acquisition Corp. entered into an amendment (the “Fourth Revolving Credit Agreement Amendment”) to the Revolving Credit Agreement among Acquisition Corp. and Credit Suisse AG, as administrative agent, governing Acquisition Corp.’s revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Fourth Revolving Credit Agreement Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate and other rates for alternate currencies, such as EURIBOR and SONIA.
On November 30, 2023, Acquisition Corp. entered into an amendment (the “Fifth Revolving Credit Agreement Amendment”) to the revolving credit agreement, dated January 31, 2018, as amended, among Acquisition Corp., the several banks and other financial institutions party thereto and Credit Suisse AG, Cayman Islands Branch, as predecessor administrative agent, governing Acquisition Corp.’s revolving credit facility (the “Revolving Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Fifth Revolving Credit Agreement Amendment (among other changes): (i) increased the commitments under the Fifth Revolving Credit Agreement Amendment from an aggregate principal amount of $300 million to an aggregate principal amount of $350 million, (ii) extended the final maturity date of the Revolving Credit Facility from April 3, 2025 to November 30, 2028, (iii) appointed JPMorgan Chase Bank, N.A. as administrative agent in the place of Credit Suisse AG, Cayman Islands Branch, (iv) modified the existing springing Secured Indebtedness to EBITDA Ratio financial maintenance covenant by increasing the springing threshold from $105,000,000 to $140,000,000, and (v) included provisions that allow Acquisition Corp. to terminate the security interests securing the obligations under the Revolving Credit Facility upon the satisfaction of certain conditions and, in the event that the security interests are so terminated, the existing springing Secured Indebtedness to EBITDA Ratio financial maintenance covenant (which is calculated net of up to $250 million of cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries) shall automatically be replaced with a new financial maintenance covenant prohibiting Acquisition Corp. from permitting the Total Indebtedness to EBITDA Ratio to be greater than 3.60:1.00 (calculated net of all cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries) as of the end of any fiscal quarter.
On September 20, 2024, Acquisition Corp. entered into an amendment (the “Sixth Revolving Credit Agreement Amendment”) to the revolving credit agreement, dated January 31, 2018, as amended, among Acquisition Corp., the several banks and other financial institutions party thereto and Credit Suisse AG, Cayman Islands Branch, as predecessor administrative agent, governing the Revolving Credit Facility with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Sixth Revolving Credit Agreement Amendment amended the First Lien Indebtedness to EBITDA Ratio, the Senior Secured Indebtedness to EBITDA Ratio and the Total Indebtedness to EBITDA Ratio, in each case so that the applicable ratio is calculated net of up to $750 million of cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries as of the date of determination.
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Acquisition Corp. is the borrower under the Revolving Credit Agreement which provides for a revolving credit facility in the amount of up to $350 million and includes a $90 million letter of credit sub-facility. Amounts are available under the Revolving Credit Facility in U.S. dollars, euros or pounds sterling. The Revolving Credit Agreement permits loans for general corporate purposes and may also be utilized to issue letters of credit. The loans under the Revolving Credit Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Revolving Term SOFR”), and other rates for alternate currencies, such as EURIBOR and SONIA, as provided in the Revolving Credit Agreement, subject to a zero floor, plus 1.75% per annum in the case of Initial Revolving Loans (as defined in the Revolving Credit Agreement), or 1.875% per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0% per annum, plus, in each case, 0.75% per annum in the case of Initial Revolving Loans, or 0.875% per annum in the case of 2020 Revolving Loans; provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement. Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.02x at September 30, 2025, the applicable margin for SOFR loans and RFR loans would be 1.375% instead of 1.875% and the applicable margin for ABR loans would be 0.375% instead of 0.875% in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement).
Prepayments
If, at any time, the aggregate amount of outstanding loans (including letters of credit outstanding thereunder) exceeds the commitments under the Revolving Credit Facility, prepayments of the loans (and after giving effect to such prepayment the cash collateralization of letters of credit) will be required in an amount equal to such excess. The application of proceeds from mandatory prepayments shall not reduce the aggregate amount of then effective commitments under the Revolving Credit Facility and amounts prepaid may be reborrowed, subject to then effective commitments under the Revolving Credit Facility.
Voluntary reductions of the unutilized portion of the Commitments under the Revolving Credit Facility are permitted at any time in certain minimum principal amounts, without premium or penalty. Voluntary prepayments of borrowings under the Revolving Credit Facility are permitted at any time in certain minimum principal amounts, subject to reimbursement of the lenders’ redeployment costs actually incurred in the case of a prepayment of SOFR-based borrowings other than on the last day of the relevant interest period. There were no loans outstanding under the Revolving Credit Facility at September 30, 2025.
Senior Term Loan Facility
Acquisition Corp. is party to a $1,145 million senior secured term loan credit facility, pursuant to a credit agreement dated November 1, 2012, as amended or supplemented (the “Senior Term Loan Credit Agreement”) with Credit Suisse AG, as administrative agent and collateral agent, and the other financial institutions and lenders from time to time party thereto (as described below, the “Senior Term Loan Facility” and, together with the Revolving Credit Facility, the “Senior Credit Facilities”).
On January 20, 2021, Acquisition Corp. entered into an amendment (the “Senior Term Loan Credit Agreement Amendment”) to the Senior Term Loan Credit Agreement. The Senior Term Loan Credit Agreement Amendment (among other changes) (i) extends the maturity date of its outstanding term loans from November 1, 2023 to January 20, 2028 and (ii) removes a number of negative covenants limiting the ability of Acquisition Corp. to take various actions. The remaining negative covenants are limited to restrictions on liens, restrictions on fundamental changes and change of control, and are in a form substantially similar to the negative covenants in the 2.750% Senior Secured Notes due 2028, 3.875% Senior Secured Notes due 2030, 3.000% Senior Secured Notes due 2031 and 2.250% Senior Secured Notes due 2031.
On April 14, 2021, Acquisition Corp. borrowed additional term loans in an amount of $325 million under the Increase Supplement. The Increase Supplement was entered into to provide for the redemption of Acquisition Corp.’s 5.500% Senior Notes due 2026. Following such borrowing, there was an aggregate principal amount outstanding under the Senior Term Loan Credit Agreement of $1,145 million.
On November 1, 2022, Acquisition Corp. entered into a Seventh Incremental Commitment Amendment (the “Seventh Incremental Commitment Amendment”) to the Senior Term Loan Credit Agreement, pursuant to which Acquisition Corp. borrowed additional term loans in the amount of $150 million for an aggregate principal amount outstanding under the Senior Term Loan Credit Agreement of $1,295 million.
On May 10, 2023, Acquisition Corp. entered into an amendment (the “Senior Term Loan Credit Agreement Amendment”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the guarantors party thereto and Credit Suisse AG, as administrative agent. The Senior Term Loan Credit Agreement Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate.
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On June 30, 2023, Acquisition Corp. entered into an increase supplement (the “Third Increase Supplement”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the guarantors party thereto, the lender party thereto and Credit Suisse AG, as administrative agent, pursuant to which Acquisition Corp. has borrowed additional Tranche G term loans in an amount equal to $150 million, the proceeds of which have been used to prepay the Tranche H term loans in full (see “Senior Term Loan Facility Amendment”), for an aggregate principal amount outstanding under the Senior Term Loan Credit Agreement of $1,295 million.
On December 29, 2023, Acquisition Corp. entered into an amendment (the “Thirteenth Amendment”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the other loan parties, Holdings, each lender party hereto, Credit Suisse AG, Cayman Islands Branch as the resigning administrative agent, and JPMorgan Chase Bank, N.A, as the successor administrative agent. The Thirteenth Amendment appointed JPMorgan Chase Bank, N.A. as administrative agent in the place of Credit Suisse AG, Cayman Islands Branch.
On January 24, 2024, Acquisition Corp entered into an amendment (the “Fourteenth Amendment”) to the credit agreement, dated November 1, 2012 (as amended by the amendments dated as of May 9, 2013, July 15, 2016, November 21, 2016, May 22, 2017, December 6, 2017, March 14, 2018, June 7, 2018, January 20, 2021, March 8, 2021, November 1, 2022, May 10, 2023, June 30, 2023 and December 29, 2023), among Acquisition Corp., the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, governing Acquisition Corp.’s senior secured term loan facility with JPMorgan Chase Bank N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Fourteenth Amendment (among other changes) extends the maturity date of its outstanding term loans from January 20, 2028 to January 24, 2031 through the issuance of tranche I term loans and refinancing of the existing tranche G term loans. The tranche I term loans shall bear interest at a rate equal to, at Acquisition Corp.’s election (i) the forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Term SOFR”) subject to a zero floor, plus 2.00% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, in each case, subject to a 1.00% floor, plus 1.00% per annum.
On September 17, 2024, Acquisition Corp. entered into an amendment (the “Fifteenth Amendment”) to the credit agreement, dated November 1, 2012 (as amended by the amendments dated as of May 9, 2013, July 15, 2016, November 21, 2016, May 22, 2017, December 6, 2017, March 14, 2018, June 7, 2018, January 20, 2021, March 8, 2021, November 1, 2022, May 10, 2023, June 30, 2023, December 29, 2023 and January 24, 2024), among Acquisition Corp., the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, governing Acquisition Corp.’s senior secured term loan facility with JPMorgan Chase Bank N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Fifteenth Amendment (among other changes) reprices the term loans through the issuance of tranche J term loans and the refinancing of the existing tranche I term loans. The tranche J term loans shall bear interest at a rate equal to, at Acquisition Corp.’s election (i) Term SOFR subject to a zero floor, plus 1.75% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, in each case, subject to a 1.00% floor, plus 1.00% per annum.
General
Acquisition Corp. is the borrower under the Senior Term Loan Facility (the “Term Loan Borrower”). The loans outstanding under the Senior Term Loan Facility mature on January 20, 2028.
In addition, the Senior Term Loan Credit Agreement provides the right for individual lenders to extend the maturity date of their loans upon the request of the Term Loan Borrower and without the consent of any other lender.
Subject to certain conditions, without the consent of the then existing lenders (but subject to the receipt of commitments), the Senior Term Loan Facility may be expanded (or a new term loan facility entered into) by up to the greater of (i) $300 million and (ii) such additional amount as would not cause the net senior secured leverage ratio, after giving effect to the incurrence of such additional amount and any use of proceeds thereof, to exceed 4.50:1.00.
Interest Rates and Fees
Term loan borrowings under the Senior Term Loan Credit Agreement bear interest at a floating rate measured by reference to, at Acquisition Corp.’s option, either (i) the forward-looking term rate based on Term SOFR subject to a zero floor, plus 1.75% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, subject to a 1.00% floor, plus, in each case, 1.00% per annum. If there is a payment default at any time, then the interest rate applicable to overdue principal and interest will be the rate otherwise applicable to such loan
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plus 2.00% per annum. Default interest will also be payable on other overdue amounts at a rate of 2.00% per annum above the amount that would apply to an alternative base rate loan.
Prepayments
The Senior Term Loan Facility is subject to mandatory prepayment and reduction in an amount equal to (a) 50% of excess cash flow (as defined in the Senior Term Loan Credit Agreement), with reductions to 25% and zero based upon achievement of a net senior secured leverage ratio of less than or equal to 4.50:1.00 or 4.00:1.00, respectively, (b) 100% of the net cash proceeds received from the incurrence of indebtedness by the Term Loan Borrower or any of its restricted subsidiaries (other than indebtedness permitted under the Senior Term Loan Facility) and (c) 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of property by the Term Loan Borrower and its restricted subsidiaries (including certain insurance and condemnation proceeds) in excess of $75 million and subject to the right of the Term Loan Borrower and its restricted subsidiaries to reinvest such proceeds within a specified period of time, and other exceptions. Voluntary prepayments of borrowings under the Senior Term Loan Facility are permitted at any time, in minimum principal amounts of $1 million or a whole multiple of $500,000 in excess thereof, subject to reimbursement of the lenders’ redeployment costs actually incurred in the case of a prepayment of adjusted SOFR borrowings other than on the last day of the relevant interest period.
Secured Notes
3.875% Senior Secured Notes
On June 29, 2020, Acquisition Corp. issued $535 million in aggregate principal amount of its 3.875% Senior Secured Notes under the Indenture, dated June 29, 2020 (the “Senior Secured Base Indenture”), among Acquisition Corp., the guarantors party thereto, Credit Suisse AG, as Notes Authorized Representative and Collateral Agent and Wells Fargo Bank, National Association, as Trustee, as supplemented by the First Supplemental Indenture (the “3.875% Supplemental Indenture”).
At any time prior to July 15, 2025, the 3.875% Senior Secured Notes may be redeemed at a redemption price equal to 100% of the principal amount of the 3.875% Senior Secured Notes redeemed plus the applicable make-whole premium (the “Make-Whole Redemption”) set forth in the Secured Notes Indenture, plus accrued and unpaid interest thereon, if any, to the applicable redemption date in accordance with the 3.875% Supplemental Indenture. Additionally, at any time prior to July 15, 2025, on one or more occasions, up to 40% of the 3.875% Senior Secured Notes may be redeemed with proceeds that Acquisition Corp. or its direct or indirect parent raises in one or more equity offerings (the “Equity Redemption”) at a redemption price equal to 103.875% of the principal amount of the 3.875% Senior Secured Notes redeemed, plus accrued and unpaid interest thereon, if any, to the date of redemption. On or after July 15, 2025, Acquisition Corp. may redeem all or a portion of the 3.875% Senior Secured Notes, at its option, at the redemption prices starting at 101.938% (expressed as percentages of principal amount) plus accrued and unpaid interest thereon, if any, on the 3.875% Senior Secured Notes to be redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15, 2025. Additionally, during any twelve-month period prior to July 15, 2025, the 3.875% Senior Secured Notes may be redeemed at a redemption price equal to 103.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to the redemption date (the “Secured Notes Redemption”).
2.750% Senior Secured Notes
Also on June 29, 2020, Acquisition Corp. issued €325 million in aggregate principal amount of its 2.750% Senior Secured Notes under the Senior Secured Base Indenture, as supplemented by the Second Supplemental Indenture, dated as of June 29, 2020, among Acquisition Corp., the guarantors party thereto and the Trustee (the “2.750% Supplemental Indenture”).
At any time prior to July 15, 2023, the 2.750% Senior Secured Notes may be redeemed pursuant to a Make-Whole Redemption in accordance with the 2.750% Supplemental Indenture. Additionally, at any time prior to July 15, 2023, the 2.750% Senior Secured Notes may be redeemed pursuant to an Equity Redemption at a redemption price equal to 102.750% of the principal amount of the 2.750% Senior Secured Notes redeemed, plus accrued and unpaid interest, subject to the same provisos as the 3.875% Senior Secured Notes Equity Redemption. On or after July 15, 2023, Acquisition Corp. may redeem all or a portion of the 2.750% Senior Secured Notes, at its option, at the redemption prices starting at 101.375% (expressed as percentages of principal amount) plus accrued and unpaid interest thereon, if any, on the 2.750% Senior Secured Notes to be redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15, 2023. Additionally, during any twelve-month period prior to July 15, 2023, the 2.750% Senior Secured Notes may be redeemed pursuant to a Secured Notes Redemption. As of September 30, 2025, there have been no redemptions on the 2.750% Senior Secured Notes.
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3.000% Senior Secured Notes
On August 12, 2020, Acquisition Corp. issued $550 million in aggregate principal amount of its 3.000% Senior Secured Notes under the Senior Secured Base Indenture, as supplemented by the Third Supplemental Indenture, dated as of August 12, 2020, among Acquisition Corp., the guarantors party thereto and the Trustee (the “3.000% Supplemental Indenture”).
At any time prior to February 15, 2026, the 3.000% Senior Secured Notes may be redeemed pursuant to a Make-Whole Redemption in accordance with the 3.000% Supplemental Indenture. Additionally, at any time prior to August 15, 2023, the 3.000% Senior Secured Notes may be redeemed pursuant to an Equity Redemption at a redemption price equal to 103.000% of the principal amount of the 3.000% Senior Secured Notes redeemed, plus accrued and unpaid interest, subject to the same provisos as the 3.875% Senior Secured Notes Equity Redemption. On or after February 15, 2026, Acquisition Corp. may redeem all or a portion of the 3.000% Senior Secured Notes, at its option, at the redemption prices starting at 101.500% (expressed as percentages of principal amount) plus accrued and unpaid interest thereon, if any, on the 3.000% Senior Secured Notes to be redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on February 15, 2026. Additionally, during any twelve-month period prior to February 15, 2026, the 3.000% Senior Secured Notes may be redeemed pursuant to a Secured Notes Redemption.
On November 2, 2020, Acquisition Corp. issued and sold $250 million of additional 3.000% Senior Secured Notes (the “Additional Notes”). Interest on the Additional Notes will accrue at the rate of 3.000% per annum and will be payable semi-annually in arrears on February 15 and August 15, commencing on February 15, 2021. The Additional Notes have identical terms as (other than the issue date and the issue price), are fungible with, and are treated as a single series of senior secured debt securities with, the 3.000% Senior Secured Notes issued on August 12, 2020 (the “Original Notes”).
2.250% Senior Secured Notes
On August 16, 2021, Acquisition Corp. issued and sold €445 million in aggregate principal amount of its 2.250% Senior Secured Notes due 2031 (the “2.250% Senior Secured Notes”) under the Senior Secured Base Indenture, as supplemented by the Fifth Supplemental Indenture, dated as of August 16, 2021, among Acquisition Corp., the guarantors party thereto and the Trustee (the “2.250% Supplemental Indenture”).
At any time prior to August 15, 2026, the 2.250% Senior Secured Notes may be redeemed pursuant to a Make-Whole Redemption in accordance with the 2.250% Supplemental Indenture. Additionally, at any time prior to August 15, 2026, the 2.250% Senior Secured Notes may be redeemed pursuant to an Equity Redemption at a redemption price equal to 102.250% of the principal amount of the 2.250% Senior Secured Notes redeemed, plus accrued and unpaid interest, subject to the same provisos as the 3.875% Senior Secured Notes Equity Redemption. On or after August 15, 2026, Acquisition Corp. may redeem all or a portion of the 2.250% Senior Secured Notes, at its option, at the redemption prices starting at 101.125% (expressed as percentages of principal amount) plus accrued and unpaid interest thereon, if any, on the 2.250% Senior Secured Notes to be redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on August 15, 2026. Additionally, during any twelve-month period prior to August 15, 2026, the 2.250% Senior Secured Notes may be redeemed pursuant to a Secured Notes Redemption at 101.125%.
3.750% Senior Secured Notes
On November 17, 2021, Acquisition Corp. priced $540 million in aggregate principal amount of its 3.750% Senior Secured Notes due 2029 (the “3.750% Senior Secured Notes,” together with the 3.875% Senior Secured Notes, the 2.750% Senior Secured Notes, the 3.000% Senior Secured Notes and the 2.250% Senior Secured Notes, the “Secured Notes”). We issued the 3.750% Senior Secured Notes on November 24, 2021 under the Senior Secured Base Indenture, as supplemented by the Sixth Supplemental Indenture, dated as of November 24, 2021, among Acquisition Corp., the guarantors party thereto and the Trustee (the “3.750% Supplemental Indenture,” together with the Senior Secured Base Indenture, the 3.875% Supplemental Indenture, the 2.750% Supplemental Indenture, the 3.000% Supplemental Indenture and the 2.250% Supplemental Indenture, the “Secured Notes Indenture”).
At any time on one or more occasions on or prior to the fifth business day following December 20, 2021 by giving notice at least five business days prior to such time, Acquisition Corp. may elect to redeem all or a portion of the 3.750% Senior Secured Notes at a special optional redemption price equal to the issue price of the 3.750% Senior Secured Notes plus 1% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the redemption date, provided, that Acquisition Corp. may only elect to redeem fewer than all of the 3.750% Senior Secured Notes, if, after giving effect to any such redemption, at least $250 million aggregate principal amount of the 3.750% Senior Secured Notes remains outstanding following such special optional redemption.
At any time prior to December 1, 2024, the 3.750% Senior Secured Notes may be redeemed pursuant to a Make-Whole Redemption in accordance with the 3.750% Supplemental Indenture. Additionally, at any time prior to December 1, 2024, the 3.750% Senior Secured Notes may be redeemed pursuant to an Equity Redemption at a redemption price equal to 103.750% of the principal
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