10-Q – 2025-08-07 – wmg-20250630.htm

Our restructuring and impairment charges increased by $13 million to $109 million for the nine months ended June 30, 2025 from $96 million for the nine months ended June 30, 2024. The current year includes contract termination costs of approximately $7 million, and approximately $32 million of impairment losses related to the 2024 Strategic Restructuring Plan as well as an impairment charge of $70 million for long-lived assets associated with certain of the Company’s non-core e-tailer operations. Impairment charges recognized in connection with the 2024 Strategic Restructuring Plan during the current year primarily relate to the write-off of certain long-form audiovisual production assets and lease termination costs for office closures. The nine months ended June 30, 2024 also includes severance costs of approximately $46 million, and $50 million of impairment losses primarily related to the 2024 Strategic Restructuring Plan.
Depreciation expense
Our depreciation expense increased by $9 million to $86 million for the nine months ended June 30, 2025 from $77 million for the nine months ended June 30, 2024. This increase is primarily due to an increase in IT assets being placed into service, including the core financials component of our new technology platform.
Amortization expense
Our amortization expense increased by $19 million, or 11%, to $186 million for the nine months ended June 30, 2025 from $167 million for the nine months ended June 30, 2024. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by certain intangible assets becoming fully amortized.
Operating income
Our operating income decreased by $129 million to $551 million for the nine months ended June 30, 2025 from $680 million for the nine months ended June 30, 2024. The decrease in operating income was due to the same factors affecting Adjusted OIBDA discussed above, as well as higher depreciation expenses primarily due to an increase in technology assets being placed into service, including the core financials component of our new technology platform, a $32 million net gain on divestitures in the prior year and higher restructuring and impairment charges as noted above.
Interest expense, net
Our interest expense, net, decreased to $119 million for the nine months ended June 30, 2025 from $121 million for the nine months ended June 30, 2024 due to lower interest rates on variable rate debt, partially offset by the impact of the Tempo Asset-Based Notes.
Other expense
Other expense for the nine months ended June 30, 2025 primarily includes foreign currency losses on our Euro-denominated debt of $43 million, currency exchange gains on our intercompany loans of $43 million, realized gains on the sale of an investment of $29 million, and realized and unrealized gains on hedging activity of $1 million. This compares to foreign currency losses on our Euro-denominated debt of $19 million and currency exchange losses on the Company’s intercompany loans of $2 million for the nine months ended June 30, 2024.
Income tax expense
Our income tax expense increased by $3 million to $123 million for the nine months ended June 30, 2025 from $120 million for the nine months ended June 30, 2024. The increase of $3 million in income tax expense is primarily due to 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 no tax on non-controlling interest were partially offset by lower pre-tax income in the current year.
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Net income
Net income decreased by $169 million to $261 million for the nine months ended June 30, 2025 from $430 million for the nine months ended June 30, 2024 as a result of the factors described above.
Noncontrolling interest
Income attributable to noncontrolling interest decreased by $31 million to $5 million for the nine months ended June 30, 2025 from $36 million for the nine months ended June 30, 2024, driven by lower income from non-wholly-owned subsidiaries in the current year, primarily due to the impact of the Licensing Extension in the prior year.
Business Segment Results
Revenues, operating income (loss) and Adjusted OIBDA by business segment were as follows (in millions):

For the Nine Months Ended
June 30, 2025 vs. 2024
2025 2024 $ Change % Change
Recorded Music
Revenues $ 3,874  $ 3,885  $ (11) —  %
Operating income 642  739  (97) -13  %
Adjusted OIBDA
914  965  (51) -5  %
Music Publishing
Revenues $ 969  $ 915  $ 54  6  %
Operating income 167  185  (18) -10  %
Adjusted OIBDA
264  247  17  7  %
Corporate expenses and eliminations
Revenue eliminations $ (4) $ (4) $ —  —  %
Operating loss (258) (244) (14) 6  %
Adjusted OIBDA loss
(139) (133) (6) 5  %
Total
Revenues $ 4,839  $ 4,796  $ 43  1  %
Operating income 551  680  (129) -19  %
Adjusted OIBDA
1,039  1,079  (40) -4  %

Recorded Music
Revenues
Recorded Music revenues decreased by $11 million to $3,874 million for the nine months ended June 30, 2025 compared to $3,885 million for the nine months ended June 30, 2024, U.S. Recorded Music revenues were $1,565 million and $1,652 million, or 40% and 43% of consolidated Recorded Music revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively. International Recorded Music revenues were $2,309 million and $2,233 million, or 60% and 57% of consolidated Recorded Music revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively.
The overall decrease in Recorded Music revenue was driven by a decrease in licensing revenue, offset by increases in artist services and expanded-rights and physical 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 Nine Months Ended
June 30, 2025 vs. 2024
2025 2024 $ Change % Change
Artist and repertoire costs $ 1,082  $ 1,050  $ 32  3  %
Product costs 909  874  35  4  %
Total cost of revenues $ 1,991  $ 1,924  $ 67  3  %

Recorded Music cost of revenues increased by $67 million, to $1,991 million for the nine months ended June 30, 2025 from $1,924 million for the nine months ended June 30, 2024. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs increased to 28% for the nine months ended June 30, 2025, from 27% for the nine months ended June 30, 2024 primarily driven by revenue mix compared to the nine months ended June 30, 2024, which included items with upfront revenue recognition without associated artist and repertoire costs, partially offset by favorable movements in currency exchange rates. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs increased to 23% for the nine months ended June 30, 2025 from 22% for the nine months ended June 30, 2024, primarily due to revenue and deal mix and the impact of the Licensing Extension in the prior year, partially offset by a favorable impact of foreign currency exchange rates in the current year.
Selling, general and administrative expense
Recorded Music selling, general and administrative expenses were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2025 vs. 2024
2025 2024 $ Change % Change
General and administrative expense (1) $ 503  $ 479  $ 24  5  %
Selling and marketing expense 461  500  (39) -8  %
Distribution expense 71  75  (4) -5  %
Total selling, general and administrative expense $ 1,035  $ 1,054  $ (19) -2  %

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(1) Includes depreciation expense of $42 million and $39 million for the nine months ended June 30, 2025 and June 30, 2024, respectively.
Recorded Music selling, general and administrative expense decreased by $19 million, to $1,035 million for the nine months ended June 30, 2025 from $1,054 million for the nine months ended June 30, 2024. The increase in general and administrative expense was primarily due to higher non-cash stock-based compensation and other related expenses of $5 million, partially offset by the impact of acquisitions of $7 million and savings from the 2024 Strategic Restructuring Plan, 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 2024 Strategic Restructuring Plan. 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 remained constant at 27% for each of the nine months ended June 30, 2025 and June 30, 2024.
Operating Income and Adjusted OIBDA
Recorded Music operating income decreased by $97 million to $642 million for the nine months ended June 30, 2025 from $739 million for the nine months ended June 30, 2024. In addition to the factors impacting Recorded Music Adjusted OIBDA noted below, the decrease in operating income was driven by a $17 million net gain on divestitures recognized in the prior year, $110 million of restructuring and non-cash impairment charges compared to $89 million recognized in the prior year, primarily related to an impairment charge of $70 million recognized in the current period for long-lived assets associated with certain of the Company’s non-core e-tailer operations offset with lower non-cash impairment charges recognized in connection with the 2024 Strategic Restructuring plan, higher non-cash stock-based compensation expense and other related costs of $5 million and higher depreciation expense of $3 million primarily due to an increase in IT assets being placed into service, including the core financials component of our new technology platform.
Recorded Music Adjusted OIBDA decreased by $51 million, to $914 million for the nine months ended June 30, 2025 from $965 million for the nine months ended June 30, 2024, largely attributable to the impact of the Copyright Settlement of $9 million and the $3 million impact of the DSP True-Up Payments in the current year, as well as the Licensing Extension of $74 million, the $23 million impact of the DSP True-up Payments, the Digital License Renewal of $12 million, and the $1 million impact of the BMG
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Termination in the prior year, partially offset by the impact of favorable movements in foreign currency exchange rates and savings from the 2024 Strategic Restructuring Plan, of which a portion has been reinvested in the Company’s business. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin decreased to 24% for the nine months ended June 30, 2025 from 25% for the nine months ended June 30, 2024, due to the factors noted above.
Music Publishing
Revenues
Music Publishing revenues increased by $54 million, or 6%, to $969 million for the nine months ended June 30, 2025 from $915 million for the nine months ended June 30, 2024. U.S. Music Publishing revenues were $520 million and $503 million, or 54% and 55% of consolidated Music Publishing revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively. International Music Publishing revenues were $449 million and $412 million, or 46% and 45% of consolidated Music Publishing revenues, for the nine months ended June 30, 2025 and June 30, 2024, respectively.
The overall increase in Music Publishing revenue was driven by growth across digital, performance, synchronization, mechanical and other publishing revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Music Publishing cost of revenues were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2025 vs. 2024
2025 2024 $ Change % Change
Artist and repertoire costs $ 612  $ 582  $ 30  5  %
Total cost of revenues $ 612  $ 582  $ 30  5  %

Music Publishing cost of revenues increased by $30 million, or 5%, to $612 million for the nine months ended June 30, 2025 from $582 million for the nine months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues decreased to 63% for the nine months ended June 30, 2025 from 64% for the nine months ended June 30, 2024.
Selling, general and administrative expense
Music Publishing selling, general and administrative expenses were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2025 vs. 2024
2025 2024 $ Change % Change
General and administrative expense (1) $ 98  $ 90  $ 8  9  %
Selling and marketing expense 3  1  2  —  %
Total selling, general and administrative expense $ 101  $ 91  $ 10  11  %

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(1) Includes depreciation expense of $4 million and $2 million for the nine months ended June 30, 2025 and June 30, 2024, respectively.
Music Publishing selling, general and administrative expense increased to $101 million for the nine months ended June 30, 2025 from $91 million for the nine months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for the nine months ended June 30, 2025 and June 30, 2024.
Operating Income and Adjusted OIBDA
Music Publishing operating income decreased by $18 million to $167 million for the nine months ended June 30, 2025 from $185 million operating income for the nine months ended June 30, 2024 largely due to the factors that impacted Music Publishing Adjusted OIBDA noted below, as well as a $14 million net gain on a divestiture recognized in the prior year.
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Music Publishing Adjusted OIBDA increased by $17 million to $264 million for the nine months ended June 30, 2025 from $247 million for the nine months ended June 30, 2024. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 27% for the nine months ended June 30, 2025 and June 30, 2024, primarily driven by revenue mix and the impact of acquisitions.
Corporate Expenses and Eliminations
Our operating loss from corporate expenses and eliminations increased by $14 million to $258 million for the nine months ended June 30, 2025 from $244 million for the nine months ended June 30, 2024, primarily due to incremental investment in technology of $20 million compared to the prior year, higher non-cash stock-based compensation and other related expenses of $8 million, executive transition costs of $4 million and higher depreciation expense of $4 million, partially offset by lower expenses related to transformation initiatives and related costs of $2 million and lower restructuring and impairment charges associated with the 2024 Strategic Restructuring Plan.
Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $6 million to $139 million for the nine months ended June 30, 2025 from $133 million for the nine months ended June 30, 2024 primarily due to the operating loss factors noted above.
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FINANCIAL CONDITION AND LIQUIDITY
Financial Condition at June 30, 2025
At June 30, 2025, we had $4.363 billion of debt (which is net of $38 million of premiums, discounts and deferred financing costs), $527 million of cash and equivalents (net debt of $3.836 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $589 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 nine months ended June 30, 2025 and June 30, 2024 are unaudited and have been derived from our condensed consolidated interim financial statements included elsewhere herein.

Nine Months Ended
June 30,
2025 2024
Cash provided by (used in):
Operating activities $ 447  $ 450 
Investing activities (273) (201)
Financing activities (344) (280)

Operating Activities
Cash provided by operating activities was $447 million for the nine months ended June 30, 2025 as compared with cash provided by operating activities of $450 million for the nine months ended June 30, 2024. The $3 million decrease in cash provided by operating activities was largely a result of movement within working capital.
Investing Activities
Cash used in investing activities was $273 million for the nine months ended June 30, 2025 as compared with cash used in investing activities of $201 million for the nine months ended June 30, 2024. The $273 million of cash used in investing activities in the nine months ended June 30, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $152 million to acquire music-related assets and $111 million relating to capital expenditures, partially offset by $36 million of proceeds from the sale of investments. The $201 million of cash used in investing activities in the nine months ended June 30, 2024 consisted of $26 million relating to investments and acquisitions of businesses, $123 million to acquire music-related assets, and $83 million relating to capital expenditures, partially offset by $19 million of proceeds from divestitures and $12 million of proceeds from the sale of investments.
Financing Activities
Cash used in financing activities was $344 million for the nine months ended June 30, 2025 as compared with cash used in financing activities of $280 million for the nine months ended June 30, 2024. The $344 million of cash used in financing activities for the nine months ended June 30, 2025 consisted of dividends paid of $283 million, payment of deferred consideration of $23 million, distributions to noncontrolling interest holders of $8 million, taxes paid related to net share settlement of restricted stock units and common stock of $19 million, common stock repurchased and retired of $3 million, repayment of the Term Loan Mortgage of $1 million and other financing activity of $7 million. The $280 million of cash used in financing activities for the nine months ended June 30, 2024 consisted of dividends paid of $267 million and distributions to noncontrolling interest holders of $6 million, taxes paid related to net share settlement of restricted stock units and common stock of $5 million and deferred financing costs paid of $2 million.
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
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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 updated in March 2025. In September 2024, 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 June 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.
Repurchase Program
On November 14, 2024, the Company’s board of directors authorized a new $100 million share repurchase program (the “Share Repurchase Program”), which is intended to offset dilution from the Omnibus Incentive Plan. The $100 million share repurchase authorization does not obligate the Company to purchase any shares and the Share Repurchase Program does not have a fixed expiration date. As of June 30, 2025, approximately $97 million of the $100 million share repurchase authorization remained available.
The Company repurchased and retired 20,000 shares for $1 million during the three months ended June 30, 2025. The Company repurchased and retired 80,383 shares for $3 million during the nine months ended June 30, 2025.
Existing Debt as of June 30, 2025
As of June 30, 2025, our long-term debt was as follows (in millions):

Revolving Credit Facility (a) $ — 
Senior Term Loan Facility due 2031 1,295 
2.750% Senior Secured Notes due 2028
381 
3.750% Senior Secured Notes due 2029
540 
3.875% Senior Secured Notes due 2030
535 
2.250% Senior Secured Notes due 2031
522 
3.000% Senior Secured Notes due 2031
800 
Mortgage Term Loan due 2033 17 
Total debt, including the current portion 4,090 
Premium less unamortized discount and unamortized DFCs (29)
Total Acquisition Corp. long-term debt, including the current portion, net $ 4,061 
Tempo Asset-Based Notes due 2050 311 
Unamortized discount
(9)
Total asset-based long-term debt, including the current portion, net (b)
$ 302 
Total long-term debt, including the current portion, net $ 4,363 

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(a) Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2025. There were no loan outstanding under the Revolving Credit Facility at June 30, 2025.
(b) The Asset-Based Notes are secured only by certain music rights owned by Tempo and are nonrecourse to the Company and its subsidiaries, other than Tempo.
For further discussion of our debt agreements, see “Liquidity” in the “Financial Condition and Liquidity” section of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
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Dividends
The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating.
The Company 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.
On May 16, 2025, the Company’s board of directors declared a cash dividend of $0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on June 3, 2025. The Company paid an aggregate of approximately $94 million and $283 million, or $0.18 and $0.54 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2025, respectively.
On August 7, 2025, the Company’s board of directors declared a cash dividend of $0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on September 3, 2025 to stockholders of record as of the close of business on August 20, 2025.
Covenant Compliance
The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of June 30, 2025.
On January 18, 2019, we delivered a notice to the trustee under the 2012 Secured Indenture and 2014 Unsecured Indenture changing the Fixed GAAP Date, as defined under the indentures, to October 1, 2018. Under the Senior Term Loan Facility, the Revolving Credit Facility and the Secured Notes Indenture, the Fixed GAAP Date is set for April 3, 2020, other than in respect of capital leases, which are frozen at November 1, 2012.
The Revolving Credit Facility contains a springing leverage ratio that is tied to a ratio based on EBITDA, which is defined under the Revolving Credit Agreement. Our ability to borrow funds under the Revolving Credit Facility may depend upon our ability to meet the leverage ratio test at the end of a fiscal quarter to the extent we have drawn a certain amount of revolving loans. On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein. EBITDA as defined in the Revolving Credit Facility is based on Consolidated Net Income (as defined in the Revolving Credit Facility), both of which terms differ from the terms “EBITDA” and “net income” as they are commonly used. For example, the calculation of EBITDA under the Revolving Credit Facility, in addition to adjusting net income to exclude interest expense, income taxes and depreciation and amortization, also adjusts net income by excluding items or expenses such as, among other items, (1) the amount of any restructuring charges or reserves; (2) any non-cash charges (including any impairment charges); (3) any net loss resulting from hedging currency exchange risks; (4) the amount of management, monitoring, consulting and advisory fees paid to Access; (5) business optimization expenses (including consolidation initiatives, severance costs and other costs relating to initiatives aimed at profitability improvement); (6) transaction expenses; (7) equity-based compensation expense; and (8) certain extraordinary, unusual or non-recurring items. The definition of EBITDA under the Revolving Credit Facility also includes adjustments for the pro forma impact of certain projected cost savings, operating expense reductions and synergies and any quality of earnings analysis prepared by independent certified public accountants in connection with an acquisition, merger, consolidation or other investment. The Senior Term Loan Facility and the Secured Notes Indenture use financial measures called “Consolidated EBITDA” or “EBITDA” and “Consolidated Net Income” that have substantially the same definitions to EBITDA and Consolidated Net Income, each as defined under the Revolving Credit Agreement.
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EBITDA as defined in the Revolving Credit Facility (referred to in this section as “Adjusted EBITDA”) is presented herein because it is a material component of the leverage ratio contained in the Revolving Credit Agreement. Non-compliance with the leverage ratio could result in the inability to use the Revolving Credit Facility, which could have a material adverse effect on our results of operations, financial position and cash flow. Adjusted EBITDA does not represent net income or cash from operating activities as those terms are defined by U.S. GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. While Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters that we may consider not to be indicative of our ongoing operations. In particular, the definition of Adjusted EBITDA in the Revolving Credit Agreement allows us to add back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income. However, these are expenses that may recur, vary greatly and are difficult to predict.
Adjusted EBITDA as presented below should not be used by investors as an indicator of performance for any future period. Further, our debt instruments require that it be calculated for the most recent four fiscal quarters. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year. In addition, our debt instruments require that the leverage ratio be calculated on a pro forma basis for certain transactions including acquisitions as if such transactions had occurred on the first date of the measurement period and may include expected cost savings and synergies resulting from or related to any such transaction. There can be no assurances that any such cost savings or synergies will be achieved in full.
In addition, Adjusted EBITDA is a key measure used by our management to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of those limitations include: (1) it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue for our business; (2) it does not reflect the significant interest expense or cash requirements necessary to service interest or principal payments on our indebtedness; and (3) it does not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments. In particular, this measure adds back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income; however, these are expenses that may recur, vary greatly and are difficult to predict. In addition, Adjusted EBITDA is not the same as net income or cash flow provided by operating activities as those terms are defined by U.S. GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. Accordingly, Adjusted EBITDA should be considered in addition to, not as a substitute for, net income (loss) and other measures of financial performance reported in accordance with U.S. GAAP.
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The following is a reconciliation of net income (loss), which is a U.S. GAAP measure of our operating results, to Adjusted EBITDA as defined, for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2025, for the twelve months ended June 30, 2024 and for the three months ended June 30, 2025 and June 30, 2024. In addition, the reconciliation includes the calculation of the Senior Secured Indebtedness to Adjusted EBITDA ratio, which we refer to as the Leverage Ratio, under the Revolving Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2025. The terms and related calculations are defined in the Revolving Credit Agreement. All amounts in the reconciliation below reflect Acquisition Corp. (in millions, except ratios):

Twelve Months Ended
June 30, Three Months Ended
June 30,
2025 2024 2025 2024
Net Income (loss)
$ 309  $ 584  $ (16) $ 141 
Income tax expense 126  178  5  30 
Interest expense, net 159  157  43  40 
Depreciation and amortization 355  323  96  80 

Net gains on divestitures and sale of securities
(29) (42) —  (1)
Restructuring costs (a)
96  61  3  2 
Net foreign exchange losses (gains) (b)
140  (17) 142  (2)

Transaction costs
6  8  3  2 
Business optimization expenses (c)
96  98  23  27 
Non-cash stock-based compensation expense (d)
67  35  16  10 
Other non-cash charges (e)
102  56  72  1 
Unrestricted subsidiary income (loss)
(10) —  (6) — 
Pro forma impact of cost savings initiatives and specified transactions (f)
302  113  75  22 
Adjusted EBITDA $ 1,719   $ 1,554   $ 456   $ 352  
Senior Secured Indebtedness (g)
$ 3,551  
Leverage Ratio (h)
2.07x
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(a) Reflects severance costs and other restructuring related expenses, including those related to the 2024 Strategic Restructuring Plan as well as the Executive Transition Costs in both the current and prior year.
(b) Reflects unrealized losses (gains) due to foreign exchange on our Euro-denominated debt, losses (gains) from foreign currency forward exchange contracts and intercompany transactions.
(c) Reflects costs associated with our transformation initiatives and technology system updates, which includes costs of $19 million and $74 million related to our finance transformation for the three and twelve months ended June 30, 2025, respectively, as well as $18 million and $70 million for the three and twelve months ended June 30, 2024, respectively.
(d) Reflects non-cash stock-based compensation expense related to the Omnibus Incentive Plan.
(e) Reflects non-cash activity, including the unrealized losses (gains) on the mark-to-market adjustment of equity investments, investment losses (gains) and non-cash impairment losses resulting from the 2024 Strategic Restructuring Plan as well as an impairment charge of $70 million for long-lived assets associated with certain of the Company’s non-core e-tailer operations recognized in the current period.
(f) Reflects expected savings resulting from transformation initiatives, including the 2025 Restructuring Plan, the 2024 Strategic Restructuring Plan, and the 2023 Restructuring Plan, as well as the pro forma impact of certain specified transactions for the three and twelve months ended June 30, 2025. Certain of these cost savings initiatives and transactions impacted quarters prior to the quarter during which they were identified within the last twelve-month period. The pro forma impact of these specified transactions and initiatives resulted in a $168 million increase in the twelve months ended June 30, 2025 Adjusted EBITDA.
(g) Reflects the balance of senior secured debt at Acquisition Corp. of approximately $4.061 billion less cash of $510 million, which excludes cash held at Tempo, an unrestricted subsidiary.
(h) Reflects the ratio of Senior Secured Indebtedness, including Revolving Credit Agreement Indebtedness, to Adjusted EBITDA. This is calculated net of cash and equivalents of the Company as of June 30, 2025 not exceeding $750 million in accordance with the Sixth Revolving Credit Agreement Amendment. If the outstanding aggregate principal amount of borrowings and drawings under letters of credit which have not been reimbursed under our Revolving Credit Facility is greater than $140 million at the end of a fiscal quarter, the maximum leverage ratio permitted under the Revolving Credit Facility is 5.00:1.00. The Company’s Revolving Credit Facility does not impose any “leverage ratio” maintenance requirement on the Company when the aggregate principal amount of borrowings and drawings under letters of credit, which have not been reimbursed under the Revolving Credit Facility, is less than or equal to $140 million at the end of a fiscal
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quarter. On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein. In connection with the acquisition of Tempo, the acquired entity was designated as an unrestricted subsidiary, and therefore net income and Adjusted EBITDA do not include the results of Tempo, and the Asset-Based Notes issued by a subsidiary of Tempo are not included in our indebtedness for purposes of calculating the Leverage Ratio.
Summary
Management believes that funds generated from our operations and borrowings under the Revolving Credit Facility and available cash and equivalents will be sufficient to fund our debt service requirements, working capital requirements and capital expenditure requirements for the foreseeable future. We also have additional borrowing capacity under our indentures and the Senior Term Loan Facility. However, our ability to continue to fund these items and to reduce debt may be affected by general economic, financial, competitive, legislative and regulatory factors, as well as other industry-specific factors such as the ability to control music piracy and the continued transition from physical to digital formats in the recorded music and music publishing industries. It could also be affected by the severity and duration of geopolitical conflicts or natural or man-made disasters, including pandemics. We and our affiliates continue to evaluate opportunities to, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, seek to pay dividends or prepay outstanding debt or repurchase or retire Acquisition Corp.’s outstanding debt or debt securities or repurchase our outstanding equity securities in open market purchases, privately negotiated purchases or otherwise. The amounts involved in any such transactions, individually or in the aggregate, may be material and may be funded from available cash or from additional borrowings. In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, we may seek to refinance the Senior Credit Facilities or our outstanding debt or debt securities with existing cash and/or with funds provided from additional borrowings.
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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As discussed in Note 17 to our audited consolidated financial statements for the fiscal year ended September 30, 2024, the Company is exposed to market risk arising from changes in market rates and prices, including movements in foreign currency exchange rates and interest rates. As of June 30, 2025, other than as described below, there have been no material changes to the Company’s exposure to market risk since September 30, 2024.
Foreign Currency Risk
Within our global business operations, we have transactional exposures that may be adversely affected by changes in foreign currency exchange rates relative to the U.S. dollar. We may at times choose to use foreign exchange currency derivatives, primarily forward contracts, to manage the risk associated with the volatility of future cash flows denominated in foreign currencies, such as unremitted or future royalties and license fees owed to our U.S. companies for the sale or licensing of U.S.-based music and merchandise abroad that may be adversely affected by changes in foreign currency exchange rates. We focus on managing the level of exposure to the risk of foreign currency exchange rate fluctuations on major currencies, which can include the Euro, British pound sterling, Japanese yen, Canadian dollar, Swedish krona, Australian dollar, Brazilian real, Mexican Peso, Norwegian krone, and Polish Zloty and in many cases we have natural hedges where we have expenses associated with local operations that offset the revenue in local currency and our Euro-denominated debt, which can offset fluctuations in the Euro. As of June 30, 2025, the Company had outstanding foreign currency forward exchange contracts for the sale of $197 million and the purchase of $124 million of foreign currencies at fixed rates. Subsequent to June 30, 2025, certain of our foreign exchange contracts expired and were not replaced.
The fair value of foreign exchange contracts is subject to changes in foreign currency exchange rates. For the purpose of assessing the specific risks, we use a sensitivity analysis to determine the effects that market risk exposures may have on the fair value of our financial instruments. For foreign exchange forward contracts outstanding at June 30, 2025, we typically perform a sensitivity analysis assuming a hypothetical 10% depreciation of the U.S. dollar against foreign currencies from prevailing foreign currency exchange rates and assuming no change in interest rates. The fair value of the foreign exchange forward contracts would have decreased by $7 million based on this analysis. Hypothetically, even if there was a decrease in the fair value of the forward contracts, because our foreign exchange contracts are used to manage foreign currency exchange rate risk, these losses would be largely offset by gains on the underlying transactions.
Interest Rate Risk
We had $4.401 billion of principal debt outstanding at June 30, 2025, of which $1.312 billion was variable-rate debt and $3.089 billion was fixed-rate debt. As such, we are exposed to changes in interest rates. At June 30, 2025, 70% of the Company’s debt was at a fixed rate. In addition, as of June 30, 2025, we have the option under our floating rate loans under the Senior Term Loan Facility to select a one, three or six month Term SOFR.
Based on the level of interest rates prevailing at June 30, 2025, the fair value of the Company’s fixed-rate and variable-rate debt was approximately $4.217 billion. Further, as of June 30, 2025, based on the amount of the Company’s fixed-rate debt, a 25 basis point increase or decrease in the level of interest rates would decrease the fair value of the fixed-rate debt by approximately $31 million or increase the fair value of the fixed-rate debt by approximately $32 million. This potential fluctuation is based on the simplified assumption that the level of fixed-rate debt remains constant with an immediate across the board increase or decrease in the level of interest rates with no subsequent changes in rates for the remainder of the period.
Inflation Risk
Inflationary factors such as increases in overhead costs may adversely affect our results of operations. We do not believe that inflation has had a material effect on our business, financial condition or results of operations to date. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases for services. Our inability or failure to do so could harm our business, financial condition or results of operations.
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ITEM 4.    CONTROLS AND PROCEDURES
Certification
The certifications of the principal executive officer and the principal financial officer (or persons performing similar functions) required by Rules 13a-14(a) and 15d-14(a) of the Exchange Act (the “Certifications”) are filed as exhibits to this report. This section of the report contains the information concerning the evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) (“Disclosure Controls”) and changes to internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) (“Internal Controls”) referred to in the Certifications and this information should be read in conjunction with the Certifications for a more complete understanding of the topics presented.
Introduction
The SEC’s rules define “disclosure controls and procedures” as controls and procedures that are designed to ensure that information required to be disclosed by public companies in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by public companies in the reports that they file or submit under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The SEC’s rules define “internal control over financial reporting” as a process designed by, or under the supervision of, a public company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, or U.S. GAAP, including those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
The Company’s management, including its principal executive officer and principal financial officer, does not expect that our Disclosure Controls or Internal Controls will prevent or detect all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the limitations in any and all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Further, the design of any control system is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected even when effective Disclosure Controls and Internal Controls are in place.
The Company previously started a multi-year implementation to upgrade our information technology and finance infrastructure, including related systems and processes. The upgrades are designed to enhance our financial records and the flow of financial information, improve data analysis and accelerate our financial reporting. The deployment of our new technology platform is currently being implemented using a wave-based approach. As of June 2025, the Company has completed the launch of the core financials component of our new technology platform for the Music Publishing segment as well as various Recorded Music territories. The Company will continue to roll out this component and additional components of the Enterprise Resource Planning (“ERP”) system in phases across our organization.
In connection with this ERP implementation, the Company has updated our internal controls over financial reporting, as necessary, to allow for modifications to our business processes and accounting procedures. As the wave-based implementation of our new technology platform continues, the Company will continue to change its processes and procedures which, in turn, could result in further changes to our internal controls over financial reporting. As such changes occur, the Company will evaluate whether such changes materially affect our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures
Based on management’s evaluation (with the participation of the Company’s principal executive officer and principal financial officer), as of the end of the period covered by this report, the Company’s principal executive officer and principal financial officer have concluded that the Company’s Disclosure Controls are effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act will be recorded, processed, summarized and
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reported within the time periods specified in SEC rules and forms, including that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Except as described above, there have been no changes in our internal control over financial reporting that occurred during the three and nine months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS
From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of business. The Company is currently subject to several such claims and legal proceedings. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors.

ITEM 1A.    RISK FACTORS
There are no material changes to the risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of the Company’s Class A common stock during the three months ended June 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)
April 2025 20,000  $ 29.50  20,000  $ 97 
May 2025 —  —  —  97 
June 2025 —  —  —  97

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
Not applicable.

ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.    OTHER INFORMATION
On August 5, 2025 (the “Closing Date”), Warner Music Inc. (“WMG”), a wholly owned subsidiary of the Company, entered into a Unit Purchase Agreement (the “Agreement”) by and among WMG, TenThousand Projects Holdings LLC (“10K Projects”), TenThousand Projects, LLC (“Seller”) and certain other parties thereto, pursuant to which WMG acquired from Seller, all of the common units of 10K Projects not already directly or indirectly owned by WMG (the “10K Units”), representing 49% of the issued and outstanding equity interests of 10K Projects.
The aggregate contractually agreed consideration for the 10K Units is $165 million, subject to contractual adjustments, payable by WMG in two installments. The first installment will be satisfied by a cash payment of $40 million (of which $30 million was paid on the Closing Date and $10 million will be paid on or about December 1, 2025) and issuance on the Closing Date of 1,416,666 shares of Class A Common Stock, the number of which was determined by dividing $42.5 million by $30 per share. The second installment is payable on the first anniversary of the Closing Date and will be satisfied, at the sole discretion of WMG, either by the issuance of 2,750,000 shares of Class A Common Stock, the number of which was determined by dividing $82.5 million by $30 per share, or in cash for an amount determined by multiplying 2,750,000 shares by the share price on the trading day immediately preceding issuance.
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The Class A Common Stock issued pursuant to the Agreement will be governed by lock-up periods, subject to certain exceptions, which will begin on the date of issuance and end (i) in respect of 1,416,666 shares of the Class A Common Stock issued on the Closing Date, on March 1, 2026 and (ii) in respect of the 2,750,000 shares of Class A Common Stock issued at the first anniversary of the Closing Date, on the date that is the second anniversary of the Closing Date.
The Class A Common Stock issued pursuant to the Agreement will be sold in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act, in a transaction not involving a public offering.
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ITEM 6.    EXHIBITS
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit
Number Exhibit Description
10.1*†
Mutual Separation Agreement and Release, dated May 5 , 202 5 , between Warner Music Inc. and Bryan Castellani

10.2*†
Employment Agreement, dated A pril 10 , 202 5 , between Warner Music Inc . and Armin Zerza

10.3*††
Master Operation s and Economics Agreement by and amo ng BCSS W JV Investments (B), L.P., WMG BC Holdco LLC, Beethoven JV 1, LLC, Beethoven Holdings 1, LLC, Beethoven Financi ng 1, LLC and WMG Acquisition Corp.

10.4*††
A mende d and Restated Limited Liability Company Agreement of Beethoven JV 1, LLC

10.5*††
C redit and Security Agreement among Beethov en Financing 1, LLC, Beethoven Holdings 1, LLC, Fifth Third Bank National Association , Goldman Sachs Bank USA and The Bank of New York Mellon

10.6*††
First Amendment to Credit and Security Agreement among Beethoven Financing 1, LLC, Beethoven Holdings 1, LLC, Fifth Third Bank National Association, Goldman Sachs Bank USA and The Bank of New York Mellon

31.1* Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

31.2* Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

32.1** Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2** Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
______________________________________
*    Filed herewith.
**    Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Securities Exchange Act, as amended, or otherwise subject to the liability of Section 18 of the Securities Exchange Act, as amended, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, except to the extent that the registrant specifically incorporates it by reference.
†    Identifies each management contract or compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
††    Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10(iv) of Regulation S-K. The registrant agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
August 7, 2025
WARNER MUSIC GROUP CORP.

By: /s/      R OBERT K YNCL

Name:
Title:
Robert Kyncl
Chief Executive Officer
(Principal Executive Officer)

By: /s/     ARMIN ZERZA

Name:
Title:
Armin Zerza
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

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