10-Q – 2026-08-05 – wmg-20260630.htm

revenues for the nine months ended June 30, 2025 were composed of U.S. revenues of $1,533 million and international revenues of $1,709 million, or 47% and 53% of total digital revenues, respectively.
Recorded Music revenues increased by $474 million to $4,348 million for the nine months ended June 30, 2026 compared to $3,874 million for the nine months ended June 30, 2025, which includes $106 million of favorable currency exchange fluctuations. U.S. Recorded Music revenues were $1,729 million and $1,565 million, or 40% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025. International Recorded Music revenues were $2,619 million and $2,309 million, or 60% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025.
The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, physical, and licensing revenues. Digital revenue increased by $324 million for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025, which includes a favorable impact of currency exchange fluctuations of $74 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the Copyright Settlement of $16 million and the BMG Termination of $22 million in the prior year. Adjusted for these items, digital revenue increased $354 million, or 14%. Revenue from streaming services increased $348 million to $2,922 million for the nine months ended June 30, 2026 compared to $2,574 million for the nine months ended June 30, 2025, which includes the favorable impact of foreign currency exchange rates of $72 million, and reflects the impacts of the DSP True-Up and Settlement Payments of $12 million in the current year and $4 million in the prior year, as well as the BMG Termination of $22 million in the prior year. Adjusted for these items, streaming revenue increased $362 million, or 14%. Download and other digital revenues decreased by $24 million, or 35%, to $45 million for the nine months ended June 30, 2026 from $69 million for the nine months ended June 30, 2025, primarily due to the continued shift to streaming services, and reflects the impact of the Copyright Settlement of $16 million in the prior year. Artist services and expanded-rights revenue increased by $111 million, or 22%, attributable to higher concert promotion revenue primarily in France, higher merchandising revenue and the favorable impact of foreign currency exchange rates of $15 million. Physical revenue increased by $29 million, or 7%, driven by strong U.S. releases in the current year as well as catalog and carryover success and a favorable impact of foreign currency exchange rates of $7 million, partially offset by strong releases in Korea and Japan in the prior year. Licensing revenue increased by $10 million, or 3%, primarily driven by the favorable impact of foreign currency exchange rates of $10 million. Top sellers for the nine months ended June 30, 2026 included Alex Warren, sombr, Bruno Mars, Ed Sheeran and Benson Boone.
Music Publishing revenues increased by $123 million, or 13%, to $1,092 million for the nine months ended June 30, 2026 from $969 million for the nine months ended June 30, 2025. U.S. Music Publishing revenues were $562 million and $520 million, or 51% and 54% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively. International Music Publishing revenues were $530 million and $449 million, or 49% and 46% of Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.
The overall increase in Music Publishing revenue was attributable to increases in digital revenue of $75 million, or 13%, performance revenue of $14 million, or 8%, synchronization revenue of $28 million, or 20%, and mechanical revenue of $8 million, or 17%. The increase in digital revenue was primarily driven by continued growth in streaming revenue, partially offset by the impact of the MLC Historical Matched Royalties of $17 million in the prior year. Adjusted for the impact of the MLC Historical Matched Royalties of $17 million, digital revenue increased $92 million, or 16%. Revenue from streaming services grew by $73 million, or 12%, to $665 million for the nine months ended June 30, 2026 from $592 million for the nine months ended June 30, 2025, reflecting continued market growth and the impact of new deals and renewals, and a favorable impact of foreign currency exchange rates of $11 million. The growth in performance revenue is attributable to growth from touring, radio and live events primarily in Europe, and the growth in synchronization revenue is attributable to the timing of other copyright infringement settlements, higher television and commercial licensing activity, and a $4 million impact from the prior year acquisition of Tempo. The growth in mechanical revenue is primarily driven by the impact of new deals and the timing of distributions.
Revenue by Geographical Location
U.S. revenue increased by $206 million, or 10%, to $2,291 million for the nine months ended June 30, 2026 from $2,085 million for the nine months ended June 30, 2025. U.S. Recorded Music revenue increased by $164 million, or 10%, primarily driven by an increase in digital revenue of $79 million, or 7%, which reflects higher streaming revenue of $98 million, or 9%, partially offset by lower download and other digital revenue of $19 million, or 43%, and the impacts of the DSP True-Up and Settlement Payments of $5 million in the current year, as well as the Copyright Settlement of $16 million and the BMG Termination of $15 million in the prior year. The decrease in download and other digital revenue is due to the continued shift to streaming and includes the $16 million impact of the Copyright Settlement in the prior year. U.S. Recorded Music physical revenue increased by $46 million, or 27%, driven by strong releases in the current year as well as catalog and carryover success. U.S. Recorded Music artist services and expanded-rights revenue increased by $21 million, or 18%, driven by higher merchandising revenue of approximately $26 million, partially offset by a decrease in other artists services and expanded-rights revenue, including advertising revenue. Licensing revenue increased by $18 million, or 17%, primarily driven by higher copyright infringement settlements of approximately $13 million compared to the
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prior year. U.S. Music Publishing revenue increased by $42 million, or 8%, to $562 million for the nine months ended June 30, 2026 from $520 million for the nine months ended June 30, 2025. U.S. Music Publishing digital revenue increased by $15 million, attributable to higher streaming revenue of $16 million, or 5%, partially offset by a decrease in download and other digital revenue of $1 million, and the impact of the MLC Historical Matched Royalties of $17 million in the prior year. U.S. Music Publishing synchronization revenue increased by $27 million, or 31%, driven by timing of other copyright infringement settlements, higher television and commercial licensing activity and the impact of acquisitions. U.S. Music Publishing mechanical revenue increased by $2 million, or 20%, and U.S. Music Publishing performance revenue decreased $1 million, or 2%, for the nine months ended June 30, 2026 compared to the nine months ended June 30, 2025.
International revenue increased by $391 million, or 14%, to $3,149 million for the nine months ended June 30, 2026 from $2,758 million for the nine months ended June 30, 2025. Excluding the favorable impact of foreign currency exchange rates of $130 million, international revenue increased by $261 million, or 9%. International Recorded Music revenue increased by $310 million, driven by increases in digital revenue of $245 million and artist services and expanded-rights revenue of $90 million, partially offset by a decrease in physical revenue of $17 million and in licensing revenue of $8 million. International Recorded Music digital revenue increased by $245 million, attributable to higher streaming revenue of $250 million and a favorable impact of foreign currency exchange rates of $72 million, partially offset by lower download and other digital revenue of $5 million, and the impacts of the DSP True-Up and Settlement Payments of $7 million in the current year and $4 million in the prior year, as well as the BMG Termination of $7 million in the prior year. International Recorded Music artist services and expanded-rights revenue increased by $90 million, primarily due to higher concert promotion revenue in France. International Recorded Music physical revenue decreased by $17 million, driven by strong releases primarily in Korea and Japan in the prior year, partially offset by a favorable impact of foreign currency exchange rates of $7 million, and international Recorded Music licensing revenue decreased by $8 million primarily due to higher licensing activity in the prior year. International Music Publishing revenue increased by $81 million, or 18%, to $530 million for the nine months ended June 30, 2026 from $449 million for the nine months ended June 30, 2025. This was driven by increases in digital revenue of $60 million, performance revenue of $15 million due to higher concert, touring and live events revenue, mechanical revenue of $6 million, and synchronization revenue of $1 million. International Music Publishing digital growth is primarily driven by streaming revenue growth of $57 million, or 24%.
Cost of revenues
Our cost of revenues was composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Artist and repertoire costs $ 1,914  $ 1,689  $ 225  13  %
Product costs 1,013  909  104  11  %
Total cost of revenues $ 2,927  $ 2,598  $ 329  13  %

Artist and repertoire costs increased by $225 million, to $1,914 million for the nine months ended June 30, 2026 from $1,689 million for the nine months ended June 30, 2025. Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the nine months ended June 30, 2026 and June 30, 2025.
Product costs increased by $104 million, to $1,013 million for the nine months ended June 30, 2026 from $909 million for the nine months ended June 30, 2025. Product costs as a percentage of revenue remained constant at 19% for each of the nine months ended June 30, 2026 and June 30, 2025.
Selling, general and administrative expenses
Our selling, general and administrative expenses were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
General and administrative expense (1) $ 799  $ 842  $ (43) -5  %
Selling and marketing expense 486  482  4  1  %
Distribution expense 97  71  26  37  %
Total selling, general and administrative expense $ 1,382  $ 1,395  $ (13) -1  %

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(1) Includes depreciation expense of $95 million and $86 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.
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Total selling, general and administrative expense decreased by $13 million, to $1,382 million for the nine months ended June 30, 2026 from $1,395 million for the nine months ended June 30, 2025, driven by savings from the Company’s restructuring plans, of which a portion has been reinvested into the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of approximately $25 million. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 25% for the nine months ended June 30, 2026, from 29% for the nine months ended June 30, 2025 due to the factors noted below.
General and administrative expense decreased by $43 million to $799 million for the nine months ended June 30, 2026 from $842 million for the nine months ended June 30, 2025. The decrease in general and administrative expense was driven by savings from the Company’s restructuring plans, of which a portion has been reinvested into the Company’s business and lower non-cash stock-based compensation expense of $17 million, partially offset by higher depreciation expense of $9 million related to technology assets being placed into service, including the core financials component of our new technology platform. Expressed as a percentage of revenue, general and administrative expense decreased to 15% for the nine months ended June 30, 2026 from 17% for the nine months ended June 30, 2025 due to the factors noted above.
Selling and marketing expense increased by $4 million, or 1%, to $486 million for the nine months ended June 30, 2026 from $482 million for the nine months ended June 30, 2025. Expressed as a percentage of revenue, selling and marketing expense decreased to 9% for the nine months ended June 30, 2026, from 10% for the nine months ended June 30, 2025, primarily due to revenue growth and savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.
Distribution expense increased by $26 million to $97 million for the nine months ended June 30, 2026 from $71 million for the nine months ended June 30, 2025. Expressed as a percentage of revenue, distribution expense increased to 2% for the nine months ended June 30, 2026, from 1% for the nine months ended June 30, 2025 primarily due to revenue mix, including higher merchandising and physical revenues.
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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 our primary measure of financial 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 Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Net income attributable to Warner Music Group Corp. $ 563  $ 256  $ 307  —  %
Income attributable to noncontrolling interest (7) 5  (12) —  %
Net income 556  261  295  —  %
Income tax expense 211  123  88  72  %
Income before income taxes 767  384  383  100  %
Other (income) expense (52) 48  (100) —  %
Interest expense, net 135  119  16  13  %
Loss on extinguishment of debt 7  —  7  —  %
Operating income 857  551  306  56  %
Amortization expense 218  186  32  17  %
Depreciation expense 95  86  9  10  %
Restructuring and impairments 47  109  (62) -57  %
Transformation initiatives and other related costs 39  54  (15) -28  %
Executive transition costs —  4  (4) -100  %
Net loss on divestitures 5  —  5  —  %
Non-cash stock-based compensation and other related costs 32  49  (17) -35  %
Adjusted OIBDA $ 1,293  $ 1,039  $ 254  24  %

Adjusted OIBDA
Adjusted OIBDA increased by $254 million to $1,293 million for the nine months ended June 30, 2026 as compared to $1,039 million for the nine months ended June 30, 2025, driven by revenue mix, the impact of the DSP True-Up and Settlement Payments of $7 million in the current year, and savings from the Company’s strategic restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by the impacts of the DSP True-Up and Settlement Payments of $3 million, the $9 million impact of the Copyright Settlement, the $4 million impact of the MLC Historical Matched Royalties and the $2 million impact of the BMG Termination in the prior year and unfavorable movements in currency exchange rates of approximately $4 million. Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 24% for the nine months ended June 30, 2026 from 21% for the nine months ended June 30, 2025.
Non-cash stock-based compensation and other related costs
Our non-cash stock-based compensation and other related costs decreased by $17 million to $32 million for the nine months ended June 30, 2026 from $49 million for the nine months ended June 30, 2025, primarily driven by the favorable impact of forfeitures in the current year.
Net loss on divestitures
Net loss on divestitures during the nine months ended June 30, 2026 includes a pre-tax loss of $5 million in connection with the divestiture of certain assets. There was no net loss on divestitures during the nine months ended June 30, 2025.

Executive transition costs

     There were no executive transition costs for the nine months ended June 30, 2026. Executive transition costs were $4 million during the nine months ended June 30, 2025, which consisted of severance costs associated with the departure of our former CFO during fiscal 2025.
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Transformation initiatives and other related costs
Our transformation initiatives and other related costs decreased by $15 million to $39 million for the nine months ended June 30, 2026 from $54 million for the nine months ended June 30, 2025 primarily driven by lower project costs associated with our finance transformation.
Restructuring and Impairments

Our restructuring and impairment charges decreased to $47 million for the nine months ended June 30, 2026 from $109 million for the nine months ended June 30, 2025. The current year includes an additional impairment charge of $14 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025, while the prior year includes the initial impairment charge of $70 million for long-lived assets associated with EMP.
Depreciation expense
Our depreciation expense increased by $9 million to $95 million for the nine months ended June 30, 2026 from $86 million for the nine months ended June 30, 2025. This increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.
Amortization expense
Our amortization expense increased by $32 million, or 17%, to $218 million for the nine months ended June 30, 2026 from $186 million for the nine months ended June 30, 2025. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by a decrease of approximately $4 million from the classification of EMP intangible assets as held for sale.
Operating income
Our operating income increased by $306 million to $857 million for the nine months ended June 30, 2026 from $551 million for the nine months ended June 30, 2025. The increase in operating income was due to the same factors affecting Adjusted OIBDA discussed above, partially offset by higher amortization expenses of $32 million and higher depreciation expenses of $9 million, as noted above.
Interest expense, net
Our interest expense, net, increased to $135 million for the nine months ended June 30, 2026 from $119 million for the nine months ended June 30, 2025, primarily due to interest expense on incremental debt of approximately $8 million related to the Beethoven Credit Agreement and interest expense on incremental debt of approximately $4 million related to the Tempo Asset-Based Notes acquired in connection with the acquisition of Tempo Music in the prior year, partially offset by lower interest rates on variable rate debt in the current year.
Other (income) expense
Other income for the nine months ended June 30, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $24 million, currency exchange gains on our intercompany loans of $12 million, and realized and unrealized losses on hedging activity of $2 million. This compares to foreign currency losses on our Euro-denominated debt of $43 million, currency exchange losses on our intercompany loans of $43 million, realized gains on the sale of an investment of $29 million, and a realized and unrealized gain on hedging activity of $1 million for the nine months ended June 30, 2025.
Loss on extinguishment of debt
We recorded a loss on extinguishment of debt in the amount of $7 million for the nine months ended June 30, 2026, which represents the unamortized balances of original issuance discounts and deferred financing costs in connection with the refinancing of our Tranche B Term Loans. There was no loss on extinguishment of debt for the nine months ended June 30, 2025.
Income tax expense
Our income tax expense increased by $88 million to $211 million for the nine months ended June 30, 2026 from $123 million for the nine months ended June 30, 2025. The increase of $88 million in income tax expense is primarily due to an increase in pre-tax
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income in the current year, taxable gain on the Company’s sale of certain recorded music catalog rights to Beethoven JV, and an $18 million smaller benefit from EMP impairment in the current year. These charges were partially offset by the tax benefit associated with partial release of valuation allowance on EMP.
Net income
Net income increased by $295 million to $556 million for the nine months ended June 30, 2026 from $261 million for the nine months ended June 30, 2025 as a result of the factors described above.
Noncontrolling interest
There was income attributable to noncontrolling interest of $7 million for the nine months ended June 30, 2026 compared to a loss of $5 million for the nine months ended June 30, 2025.
Business Segment Results
Results by business segment were as follows (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Recorded Music
Revenues $ 4,348  $ 3,874  $ 474  12  %
Operating income 943  642  301  47  %
Depreciation and amortization expense 146  138  8  6  %
Restructuring and impairments 34  110  (76) -69  %

Non-cash stock-based compensation and other related costs 3  24  (21) -88  %
Adjusted OIBDA 1,126  914  212  23  %
Music Publishing
Revenues $ 1,092  $ 969  $ 123  13  %
Operating income 197  167  30  18  %
Depreciation and amortization expense 107  93  14  15  %

Non-cash stock-based compensation and other related costs 4  4  —  —  %
Adjusted OIBDA 308  264  44  17  %
Corporate expenses and eliminations
Revenue eliminations $ (4) $ (4) $ —  —  %
Operating loss (283) (258) (25) 10  %
Depreciation and amortization expense 60  41  19  46  %
Restructuring and impairments 13  (1) 14  —  %
Transformation initiatives and other related costs 39  54  (15) -28  %
Executive transition costs —  4  (4) -100  %
Net loss on divestitures 5  —  5  —  %
Non-cash stock-based compensation and other related costs 25  21  4  19  %
Adjusted OIBDA loss (141) (139) (2) 1  %
Total
Revenues $ 5,436  $ 4,839  $ 597  12  %
Operating income 857  551  306  56  %
Adjusted OIBDA
1,293  1,039  254  24  %

Recorded Music
Revenues
Recorded Music revenues increased by $474 million to $4,348 million for the nine months ended June 30, 2026 compared to $3,874 million for the nine months ended June 30, 2025. U.S. Recorded Music revenues were $1,729 million and $1,565 million, or 40% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025. International
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Recorded Music revenues were $2,619 million and $2,309 million, or 60% of consolidated Recorded Music revenues for each of the nine months ended June 30, 2026 and June 30, 2025.
The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, physical and licensing revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Recorded Music cost of revenues was composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Artist and repertoire costs $ 1,231  $ 1,082  $ 149  14  %
Product costs 1,013  909  104  11  %
Total cost of revenues $ 2,244  $ 1,991  $ 253  13  %

Recorded Music cost of revenues increased by $253 million, to $2,244 million for the nine months ended June 30, 2026 from $1,991 million for the nine months ended June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the nine months ended June 30, 2026 and June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 23% for each of the nine months ended June 30, 2026 and June 30, 2025.
Selling, general and administrative expense
Recorded Music selling, general and administrative expenses were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
General and administrative expense (1) $ 448  $ 503  $ (55) -11  %
Selling and marketing expense 468  461  7  2  %
Distribution expense 97  71  26  37  %
Total selling, general and administrative expense $ 1,013  $ 1,035  $ (22) -2  %

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(1) Includes depreciation expense of $32 million and $42 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.
Recorded Music selling, general and administrative expense decreased by $22 million, to $1,013 million for the nine months ended June 30, 2026 from $1,035 million for the nine months ended June 30, 2025, which includes unfavorable movements in foreign currency exchange rates of $23 million. The decrease in general and administrative expense was primarily due to savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business, and lower non-cash stock-based compensation and other related expenses of $21 million. The increase in selling and marketing expense was primarily due to higher variable marketing spend for key releases. The increase in distribution expense was primarily due to revenue mix from higher merchandising and physical revenues. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 23% for the nine months ended June 30, 2026 from 27% for the nine months ended June 30, 2025.
Operating Income and Adjusted OIBDA
Recorded Music operating income increased by $301 million to $943 million for the nine months ended June 30, 2026 from $642 million for the nine months ended June 30, 2025. In addition to the factors impacting Recorded Music Adjusted OIBDA noted below, the increase in operating income was driven by a decrease in restructuring and non-cash impairment charges of $76 million, lower non-cash stock-based compensation expense and other related costs of $21 million, and lower depreciation expense of $10 million compared to the prior year, partially offset by higher amortization expenses of $18 million related to acquisitions of music-related assets.
Recorded Music Adjusted OIBDA increased by $212 million, to $1,126 million for the nine months ended June 30, 2026 from $914 million for the nine months ended June 30, 2025, largely attributable to strong operating performance and revenue growth,
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savings from the Company’s strategic restructuring plans, of which a portion has been reinvested in the Company’s business and the impact of the DSP True-Up and Settlement Payments of $7 million in the current year, partially offset by the $3 million impact of the DSP True-Up and Settlement Payments, the $9 million impact of the Copyright Settlement and $2 million impact of the BMG Termination in the prior year, and unfavorable movements in foreign currency exchange rates of approximately $2 million. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 26% for the nine months ended June 30, 2026 from 24% for the nine months ended June 30, 2025, due to the factors noted above.
Music Publishing
Revenues
Music Publishing revenues increased by $123 million, or 13%, to $1,092 million for the nine months ended June 30, 2026 from $969 million for the nine months ended June 30, 2025. U.S. Music Publishing revenues were $562 million and $520 million, or 51% and 54% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively. International Music Publishing revenues were $530 million and $449 million, or 49% and 46% of consolidated Music Publishing revenues, for the nine months ended June 30, 2026 and June 30, 2025, respectively.
The overall increase in Music Publishing revenue was driven by growth across digital, synchronization, performance and mechanical revenues, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
Cost of revenues
Music Publishing cost of revenues were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Artist and repertoire costs $ 687  $ 612  $ 75  12  %
Total cost of revenues $ 687  $ 612  $ 75  12  %

Music Publishing cost of revenues increased by $75 million, or 12%, to $687 million for the nine months ended June 30, 2026 from $612 million for the nine months ended June 30, 2025. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the nine months ended June 30, 2026 and June 30, 2025.
Selling, general and administrative expense
Music Publishing selling, general and administrative expenses were composed of the following amounts (in millions):

For the Nine Months Ended
June 30, 2026 vs. 2025
2026 2025 $ Change % Change
General and administrative expense (1) $ 100  $ 98  $ 2  2  %
Selling and marketing expense 4  3  1  33  %
Total selling, general and administrative expense $ 104  $ 101  $ 3  3  %

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(1) Includes depreciation expense of $3 million and $4 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.
Music Publishing selling, general and administrative expense increased to $104 million for the nine months ended June 30, 2026 from $101 million for the nine months ended June 30, 2025. Expressed as a percentage of Music Publishing revenue, Music Publishing selling, general and administrative expense remained constant at 10% for each of the nine months ended June 30, 2026 and June 30, 2025.
Operating Income and Adjusted OIBDA
Music Publishing operating income increased by $30 million to $197 million for the nine months ended June 30, 2026 from $167 million operating income for the nine months ended June 30, 2025 largely due to the factors that impacted Music Publishing Adjusted OIBDA noted below, coupled with lower depreciation expenses of $1 million, partially offset by higher amortization expenses of $15 million related to acquisitions.
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Music Publishing Adjusted OIBDA increased by $44 million to $308 million for the nine months ended June 30, 2026 from $264 million for the nine months ended June 30, 2025, primarily driven by strong operating performance and revenue growth, partially offset by the $4 million impact of the MLC Historical Matched Royalties in the prior year and unfavorable movements in foreign currency exchange rates of approximately $1 million. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin increased to 28% for the nine months ended June 30, 2026 from 27% for the nine months ended June 30, 2025.
Corporate Expenses and Eliminations
Our operating loss from corporate expenses and eliminations increased by $25 million to $283 million for the nine months ended June 30, 2026 from $258 million for the nine months ended June 30, 2025, primarily due to higher depreciation expense of $20 million, an increase in restructuring and impairment costs of $14 million, a net loss on divestitures of $5 million, and higher non-cash stock-based compensation and other related expenses of $4 million, partially offset by lower expenses related to transformation initiatives and related costs of $15 million.
Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $2 million to $141 million for the nine months ended June 30, 2026 from $139 million for the nine months ended June 30, 2025, primarily due to the operating loss factors noted above.
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FINANCIAL CONDITION AND LIQUIDITY
Financial Condition at June 30, 2026
At June 30, 2026, we had $4.710 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $618 million of cash and equivalents (net debt of $4.092 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $854 million of Warner Music Group Corp. equity. This compares to $4.365 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $532 million of cash and equivalents (net debt of $3.833 billion) and $647 million of Warner Music Group Corp. equity at September 30, 2025.
Cash Flows
The following table summarizes our historical cash flows (in millions). The financial data for the nine months ended June 30, 2026 and June 30, 2025 are unaudited and have been derived from our condensed consolidated interim financial statements included elsewhere herein.

Nine Months Ended
June 30,
2026 2025
Cash provided by (used in):
Operating activities $ 708  $ 447 
Investing activities (674) (273)
Financing activities 59  (344)

Operating Activities
Cash provided by operating activities was $708 million for the nine months ended June 30, 2026 as compared with cash provided by operating activities of $447 million for the nine months ended June 30, 2025. The $261 million increase in cash provided by operating activities was largely a result of strong operating performance.
Investing Activities
Cash used in investing activities was $674 million for the nine months ended June 30, 2026 as compared with cash used in investing activities of $273 million for the nine months ended June 30, 2025. The $674 million of cash used in investing activities in the nine months ended June 30, 2026 consisted of $106 million relating to investments and acquisitions of businesses, $505 million to acquire music-related assets and $75 million relating to capital expenditures, partially offset by $10 million of proceeds from net divestitures and $2 million of proceeds from the sale of investments. The $273 million of cash used in investing activities in the nine months ended June 30, 2025 consisted of $46 million relating to investments and acquisitions of businesses, $152 million to acquire music-related assets, and $111 million relating to capital expenditures, partially offset by $36 million of proceeds from the sale of investments.
Financing Activities
Cash provided by financing activities was $59 million for the nine months ended June 30, 2026 as compared with cash used in financing activities of $344 million for the nine months ended June 30, 2025. The $59 million of cash provided by financing activities for the nine months ended June 30, 2026 consisted of proceeds from the Beethoven Credit Agreement of $370 million and contributions from redeemable noncontrolling interest holder of $135 million, partially offset by dividends paid of $300 million, payment of deferred consideration of $47 million, distributions to noncontrolling interest holders of $9 million, taxes paid related to net share settlement of restricted stock units and common stock of $27 million, common stock repurchased and retired of $48 million, and deferred financing costs paid of $14 million, repayment of the Term Loan Mortgage of $1 million. The $344 million of cash used in financing activities for the nine months ended June 30, 2025 consisted of dividends paid of $283 million, payment of deferred consideration of $23 million, distributions to noncontrolling interest holders of $8 million, taxes paid related to net share settlement of restricted stock units and common stock of $19 million, common stock repurchased and retired of $3 million, repayment of the Term Loan Mortgage of $1 million and other financing activity of $7 million.
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
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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 from the date of this filing.

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. In September 2025, Fitch assigned us a BBB- long-term credit rating with a stable outlook. In addition, our weighted-average interest rate on our outstanding indebtedness has decreased from 10.5% in 2011 to 4.0% as of June 30, 2026. Our nearest-term maturity date is in 2028. Subject to market conditions, we continue to take opportunistic steps to extend our maturity dates, reduce related interest expense and make other changes. 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. We did not repurchase any common shares during the three months ended June 30, 2026. The Company repurchased and retired 1,670,500 shares for $48 million during the nine months ended June 30, 2026. As of June 30, 2026, approximately $37 million of the $100 million share repurchase authorization remained available.
Existing Debt as of June 30, 2026
As of June 30, 2026, our long-term debt was as follows (in millions):

Revolving Credit Facility (a) $ — 
Senior Term Loan A Facility due 2031
1,295 
2.750% Senior Secured Notes due 2028
371 
3.750% Senior Secured Notes due 2029
540 
3.875% Senior Secured Notes due 2030
535 
2.250% Senior Secured Notes due 2031
508 
3.000% Senior Secured Notes due 2031
800 
Mortgage Term Loan due 2033 16 
Total debt, including the current portion 4,065 
Premium less unamortized discount and unamortized deferred financing costs (21)
Total Acquisition Corp. long-term debt, including the current portion, net $ 4,044 
Beethoven Credit Agreement (b)
370 
Tempo Asset-Based Notes due 2050 (c) 311 
Unamortized discount and unamortized DFCs
(15)
Total other long-term debt, including the current portion, net $ 666 
Total long-term debt, including the current portion, net $ 4,710 

______________________________________
(a) Reflects $350 million of commitments under the Revolving Credit Facility with no letters of credit outstanding at June 30, 2026. There were no loans outstanding under the Revolving Credit Facility at June 30, 2026.
(b) Reflects $750 million of commitments under the Beethoven Credit Agreement. There were $370 million in loans outstanding under the Beethoven Credit Agreement at June 30, 2026. Loans outstanding under the Beethoven Credit Agreement are secured only by certain music rights owned by Beethoven JV 1, LLC, a Delaware limited liability company (“Beethoven”), and are nonrecourse to the Company and its subsidiaries, other than Beethoven.
(c) The Asset-Based Notes are secured only by certain music rights owned by Tempo Music and are nonrecourse to the Company and its subsidiaries, other than Tempo Music.
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Pursuant to the Amendment, WMGCo and BainCo have committed to increase their respective initial equity commitment amounts by $100 million each.
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, 2025.
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 7, 2026, the Company’s board of directors declared a cash dividend of $0.19 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on June 2, 2026. The Company paid an aggregate of approximately $100 million and $300 million, or $0.19 and $0.57 per share, in cash dividends to stockholders and participating security holders for the three and nine months ended June 30, 2026, respectively.

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

Covenant Compliance
The Company was in compliance with its covenants under its outstanding notes, the Credit Agreement and the Asset-Based Notes as of June 30, 2026.
The Credit Agreement contains a covenant that is tied to a leverage ratio based on EBITDA, which is defined under the Credit Agreement. So long as Tranche A Term Loans remain outstanding and/or during a collateral suspension period, we are required to meet the leverage ratio test at the end of each fiscal quarter. Other than during a collateral suspension period and so long as no Tranche A Term Loans remain outstanding, our ability to borrow funds under the Revolving Credit Facility may depend on 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. EBITDA as defined in the Credit Agreement is based on Consolidated Net Income (as defined in the Credit Agreement), 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 Credit Agreement, 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 Credit Agreement 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 Secured Notes Indenture uses 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 Credit Agreement.
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EBITDA as defined in the Credit Agreement (referred to in this section as “Adjusted EBITDA”) is presented herein because it is a material component of the leverage ratio contained in the Credit Agreement. Non-compliance with the leverage ratio could result in a default under the Credit Agreement (or, if during a collateral suspension period and so long as no Tranche A Term Loans remain outstanding, 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 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, 2026, for the twelve months ended June 30, 2025 and for the three months ended June 30, 2026 and June 30, 2025. In addition, the reconciliation includes the calculation of the Senior Secured Indebtedness to Adjusted EBITDA ratio, which we refer to as the Leverage Ratio, under the Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended June 30, 2026. The terms and related calculations are defined in the 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,
2026 2025 2026 2025
Net Income
$ 665  $ 309  $ 200  $ (16)
Income tax expense 208  126  67  5 
Interest expense, net 178  159  49  43 
Depreciation and amortization 417  355  111  96 
Loss on extinguishment of debt
7  —  —  — 
Net losses (gains) on divestitures and sale of securities
1  (29) (2) — 
Restructuring costs (a)
127  96  5  3 
Net foreign exchange losses (gains) (b)
(40) 140  (1) 142 

Transaction costs
2  6  2  3 
Business optimization expenses (c)
65  96  11  23 
Non-cash stock-based compensation expense (d)
44  67  2  16 
Other non-cash charges (e)
53  102  4  72 
Bona fide joint venture income (f)
(36) (10) (16) (6)
Pro forma impact of cost savings initiatives and specified transactions (g)
141  302  30  75 
Adjusted EBITDA $ 1,832   $ 1,719   $ 462   $ 456  
Senior Secured Indebtedness (f, h) $ 3,444  
Leverage Ratio (i) 1.88x
______________________________________
(a) Reflects severance costs and other restructuring related expenses, including those related to the Company’s restructuring plans.
(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 $10 million and $49 million related to our finance transformation for the three and twelve months ended June 30, 2026, respectively, as well as $19 million and $74 million for the three and twelve months ended June 30, 2025, respectively.
(d) Reflects non-cash stock-based compensation expense related to the Omnibus Incentive Plan.
(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 Company’s restructuring plans as well as an additional impairment charge of $3 million in the quarter for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.
(f) Tempo Music and Beethoven are both bona fide joint ventures, and are therefore excluded from the calculation of net income and Adjusted EBITDA. Similarly, the Asset-Based Notes issued by a subsidiary of Tempo Music and the Beethoven Credit Facility are not included in our indebtedness for purposes of calculating the Leverage Ratio.
(g) Reflects expected savings resulting from transformation initiatives, including the 2025 Restructuring Plan, the 2024 Strategic Restructuring Plan, and the 2023 Restructuring Plan, as well as the pro forma impact of certain specified transactions for the three and twelve months ended June 30, 2026.
(h) Reflects the balance of senior secured debt at Acquisition Corp. of approximately $4.044 billion less cash of $600 million, which excludes cash and debt held at Tempo Music and Beethoven, which are both bona fide joint ventures.
(i) Reflects the ratio of Total Indebtedness, including Revolving Credit Indebtedness, to Adjusted EBITDA. This is calculated net of cash and equivalents of the Company as of June 30, 2026 not exceeding $600 million in accordance with the Credit Agreement. During a collateral suspension period, whether or not there are any Tranche A Term Loans outstanding, Total Indebtedness to EBITDA Ratio may not exceed 4.00:1.00. Other than during a collateral suspension period, so long as the Tranche A Term Loans are outstanding, Senior Secured Indebtedness to EBITDA Ratio may not exceed 5.00:1.00. Other than during a collateral suspension period, and if no Tranche A Term Loans are outstanding, and only if the outstanding aggregate principal amount of borrowings under the Revolving Credit Facility and drawings under letters of credit which
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have not been reimbursed under the Revolving Credit Facility is greater than $140 million at the end of a fiscal quarter, Senior Secured Indebtedness to EBITDA Ratio may not exceed 5.00:1.00.
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 Tranche A Term Loans. 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 Credit Agreement 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 16 to our audited consolidated financial statements for the fiscal year ended September 30, 2025, 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, 2026, other than as described below, there have been no material changes to the Company’s exposure to market risk since September 30, 2025.
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, 2026, the Company had outstanding foreign currency forward exchange contracts for the sale of $524 million and the purchase of $292 million of foreign currencies at fixed rates. Subsequent to June 30, 2026, 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, 2026, 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 $23 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 $4.746 billion of principal debt outstanding at June 30, 2026, of which $1.681 billion was variable-rate debt and $3.065 billion was fixed-rate debt. As such, we are exposed to changes in interest rates. At June 30, 2026, 65% of the Company’s debt was at a fixed rate. In addition, as of June 30, 2026, 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, 2026, the fair value of the Company’s fixed-rate and variable-rate debt was approximately $4.609 billion. Further, as of June 30, 2026, 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 $25 million or increase the fair value of the fixed-rate debt by approximately $25 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. During the first quarter of fiscal year 2026, the Company began launching the Revenue ingestion component of our Enterprise Resource Planning (“ERP”) system for certain of our Recorded Music segment revenue types and continued the roll out of the core financials component of our platform to additional Recorded Music territories, including the U.S. and several large European affiliates. The Company will continue to roll out the Core Financials component of the 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
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to be disclosed by the Company in reports that it files or submits under the Exchange Act will be recorded, processed, summarized and 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, 2026 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
In addition to the other information contained in this Quarterly Report on Form 10-Q, certain risk factors should be considered carefully in evaluating our business. A wide range of risks may affect our business and financial results, now and in the future. We consider the risks described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and the risk set forth in Part II, Item 1A “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 to be the most significant. There may be other currently unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results.

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, 2026:

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 2026 —  $ —  —  $ 37 
May 2026 —  —  —  37 
June 2026 —  —  —  37 

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
Not applicable.

ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5.    OTHER INFORMATION
On July 31, 2026, Armin Zerza stepped down for personal reasons as Chief Operating Officer and Chief Financial Officer of the Company. Pursuant to the terms of a separation agreement between the Company and Mr. Zerza dated July 31, 2026, Mr. Zerza’s departure will be treated as if it were a termination without cause under his employment agreement. Mr. Zerza will receive: (i) a bonus of $3.6 million, which includes 100% of his target bonus payable as if it were a termination without cause, as well as the other payments and benefits payable to him under his employment agreement and equity incentive award agreements as if it were a termination by the Company without cause and (ii) continued payment of his base salary and company-provided benefits through September 30, 2026.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the separation agreement, a copy of which will be filed as an exhibit to the Company’s Form 10-K for the year ended September 30, 2026.

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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* Letter Agreement, dated as of May 6, 2026, between Warner Music Inc. and Arm in Zerza

10.2*† Third Amendment to Credit and Security Agreement among Beethoven Financing 1, LLC, Beethoven Holdings 1, LLC, Fifth Third Bank National Association, Barclays Bank PLC, MUFG Bank, LTD, 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.
†    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 5, 2026
WARNER MUSIC GROUP CORP.

By: /s/      R OBERT K YNCL

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

By: /s/     LOUIS DICKLER

Name:
Title:
Louis Dickler
Acting Chief Financial Officer
(Principal Financial Officer)

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