Warner Music Group Corp.

Previous wording

•Results of operations. This section provides an analysis of our results of operations for the three and six months ended March 31, 2026 and March 31, 2025. This analysis is presented on both a consolidated and segment basis.

Current wording

•Results of operations. This section provides an analysis of our results of operations for the three and nine months ended June 30, 2026 and June 30, 2025. This analysis is presented on both a consolidated and segment basis.

Previous wording

•Financial condition and liquidity. This section provides an analysis of our cash flows for the six months ended March 31, 2026 and March 31, 2025, as well as a discussion of our financial condition and liquidity as of March 31, 2026. The discussion of our financial condition and liquidity includes recent debt financings and a summary of the key debt covenant compliance measures under our debt agreements.

Current wording

•Financial condition and liquidity. This section provides an analysis of our cash flows for the nine months ended June 30, 2026 and June 30, 2025, as well as a discussion of our financial condition and liquidity as of June 30, 2026. The discussion of our financial condition and liquidity includes recent debt financings and a summary of the key debt covenant compliance measures under our debt agreements.

Previous wording

We evaluate our operating performance based on several factors, including Adjusted OIBDA. We define Adjusted OIBDA as operating income (loss) adjusted to exclude the following items: (i) non-cash depreciation of tangible assets, (ii) non-cash amortization of intangible assets, (iii) non-cash stock-based compensation and other related expenses, (iv) gains or losses on divestitures, (v) expenses related to restructuring and transformation initiatives, which includes costs associated with the Company’s financial transformation initiative to design and implement new information technology and upgrade our finance infrastructure, and (vi) executive transition costs. Items excluded are not viewed to contribute directly to management’s evaluation of operating results. We consider Adjusted OIBDA to be an important indicator of the operational strengths and performance of our businesses. However, a limitation of the use of Adjusted OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses. Accordingly, Adjusted OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) attributable to Warner Music Group Corp. and other measures of financial performance reported in accordance with United States generally accepted accounting principles (“U.S. GAAP”). In addition, our definition of Adjusted OIBDA may differ from similarly titled measures used by other companies. A reconciliation of consolidated Adjusted OIBDA to operating income (loss) and net income (loss) attributable to Warner Music Group Corp. is provided in our “Results of Operations.”

Current wording

We evaluate our operating performance based on several factors, including Adjusted OIBDA. We define Adjusted OIBDA as operating income (loss) adjusted to exclude the following items: (i) non-cash depreciation of tangible assets, (ii) non-cash amortization of intangible assets, (iii) non-cash stock-based compensation and other related expenses, (iv) gains or losses on divestitures, (v) expenses related to restructuring and transformation initiatives, which include costs associated with the Company’s financial transformation initiative to design and implement new information technology and upgrade our finance infrastructure, and (vi) executive transition costs. Items excluded are not viewed to contribute directly to management’s evaluation of operating results. We consider Adjusted OIBDA to be an important indicator of the operational strengths and performance of our businesses. However, a limitation of the use of Adjusted OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses. Accordingly, Adjusted OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) attributable to Warner Music Group Corp. and other measures of financial performance reported in accordance with United States generally accepted accounting principles (“U.S. GAAP”). In addition, our definition of Adjusted OIBDA may differ from similarly titled measures used by other companies. A reconciliation of consolidated Adjusted OIBDA to operating income (loss) and net income (loss) attributable to Warner Music Group Corp. is provided in our “Results of Operations.”

Previous wording

For the three months ended March 31, 2026, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $5 million, all of which was recognized in our Recorded Music segment. For the six months ended March 31, 2026, total severance and other termination costs recorded in connection with the 2025 Strategic Restructuring Plan were $30 million, of which $18 million of expense was recognized in our Recorded Music segment and $12 million was recognized in Corporate. As of March 31, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2025 Strategic Restructuring Plan were $148 million with $98 million of costs recognized in our Recorded Music segment, $5 million of costs recognized in our Music Publishing segment, and $45 million recognized in Corporate. These costs are composed of $120 million of severance costs and $28 million of non-cash impairment charges primarily related to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets.

Current wording

For the three months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $4 million, of which $3 million of expense was recognized in our Recorded Music segment and $1 million was recognized in Corporate. For the nine months ended June 30, 2026, total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $34 million, of which $21 million of expense was recognized in our Recorded Music segment and $13 million was recognized in Corporate. As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2025 Restructuring Plan were $152 million with $100 million of costs recognized in our Recorded Music segment, $5 million of costs recognized in our Music Publishing segment, and $47 million recognized in Corporate. These costs are composed of $124 million of severance costs and $28 million of non-cash impairment charges primarily related to impairments of operating lease right-of-use assets that are no longer in use and royalty advances based on operational changes in the intended use of these assets. There were no charges recognized under the 2025 Restructuring Plan for the three and nine months ended June 30, 2025.

Previous wording

The cost savings under the 2024 Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of non-core operations, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformation initiative. The Company allocated a majority of the costs savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities.

Current wording

The cost savings under the 2024 Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of non-core operations, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformation initiative. The Company allocated a majority of the cost savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities.

Previous wording

As of March 31, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $215 million with $206 million of costs recognized in our Recorded Music segment and $9 million recognized in Corporate. These costs are composed of $133 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges. There was a $1 million benefit recognized for the three and six months ended March 31, 2026 related to the 2024 Strategic Restructuring Plan.

Current wording

As of June 30, 2026, total cumulative restructuring and impairment charges recognized in connection with the 2024 Strategic Restructuring Plan were $215 million with $206 million of costs recognized in our Recorded Music segment and $9 million recognized in Corporate. These costs are composed of $133 million of severance and other contract termination costs, of which $7 million was non-cash, and $82 million of non-cash impairment charges. There was a $1 million benefit recognized for the nine months ended June 30, 2026 related to the 2024 Strategic Restructuring Plan.

Previous wording

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

Current wording

For the three and nine months ended June 30, 2026, the Company recognized an impairment charge of $3 million and $14 million, respectively, within the Recorded Music segment for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025. For the three and nine months ended June 30, 2025, prior to its classification as held for sale, the Company recognized an impairment charge of $70 million within the Recorded Music segment for long-lived assets associated with EMP.

Previous wording

Total revenues increased by $248 million, or 17%, to $1,732 million for the three months ended March 31, 2026 from $1,484 million for the three months ended March 31, 2025. Revenue growth was impacted by a digital revenue settlement of $11 million in the prior-year quarter (the “DSP True-Up and Settlement Payments”). Recorded Music revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $6 million less Recorded Music digital revenue compared to the prior-year quarter. Adjusted for these items, total revenues increased by $265 million, or 18%, which includes $61 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenue for the three months ended March 31, 2026, respectively, and 79% and 21% of total revenue for the three months ended March 31, 2025, respectively. Prior to intersegment eliminations, U.S. and international revenues represented 43% and 57% of total revenues for the three months ended March 31, 2026 and 44% and 56% of total revenues for the three months ended March 31, 2025.

Current wording

Total revenues increased by $175 million, or 10%, to $1,864 million for the three months ended June 30, 2026 from $1,689 million for the three months ended June 30, 2025. Revenue growth was impacted by digital revenue from the settlement of certain copyright infringement cases of $16 million in the prior-year quarter (the “Copyright Settlement”). Recorded Music revenue growth was also unfavorably impacted by the BMG Termination, which resulted in $10 million less Recorded Music digital revenue compared to the prior-year quarter. Adjusted for these items, total revenues increased by $201 million, or 12%, which includes $16 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, Recorded Music and Music Publishing revenues represented 80% and 20% of total revenue for each of the three months ended June 30, 2026 and June 30, 2025. Prior to intersegment eliminations, U.S. and international revenues represented 42% and 58% of total revenues for the three months ended June 30, 2026 and 43% and 57% of total revenues for the three months ended June 30, 2025.

Previous wording

Total digital revenues after intersegment eliminations increased by $172 million, or 17%, to $1,199 million for the three months ended March 31, 2026 from $1,027 million for the three months ended March 31, 2025. Total streaming revenue increased by $173 million, driven by growth in Recorded Music and Music Publishing. Total streaming revenue includes $38 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, total digital revenues for the three months ended March 31, 2026 were composed of U.S. revenues of $537 million and international revenues of $662 million, or 45% and 55% of total digital revenues, respectively. Prior to intersegment eliminations, total digital revenues for the three months ended March 31, 2025 were composed of U.S. revenues of $490 million and international revenues of $539 million, or 48% and 52% of total digital revenues, respectively.

Current wording

Total digital revenues after intersegment eliminations increased by $119 million, or 11%, to $1,251 million for the three months ended June 30, 2026 from $1,132 million for the three months ended June 30, 2025. Total streaming revenue increased by $135 million, driven by growth in Recorded Music and Music Publishing. Total streaming revenue includes $15 million of favorable currency exchange fluctuations. Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2026 were composed of U.S. revenues of $556 million and international revenues of $695 million, or 44% and 56% of total digital revenues, respectively. Prior to intersegment eliminations, total digital revenues for the three months ended June 30, 2025 were composed of U.S. revenues of $535 million and international revenues of $598 million, or 47% and 53% of total digital revenues, respectively.

Previous wording

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights and physical revenues, partially offset by a decrease in licensing revenue. Digital revenue increased by $134 million, or 16%, which includes a favorable impact of currency exchange fluctuations of $34 million, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription and ad-supported revenues. Revenue from streaming services increased by $136 million, or 16%, to $961 million for the three months ended March 31, 2026 from $825 million for the three months ended March 31, 2025. Adjusted for the impacts of the DSP True-Up and Settlement Payments and the BMG Termination in the prior-year quarter, Recorded Music streaming revenue increased $153 million, or 19%, to $961 million for the three months ended March 31, 2026 from $808 million for the three months ended March 31, 2025. Download and other digital revenues decreased by $2 million, or 13%, to $14 million for the three months ended March 31, 2026 from $16 million for the three months ended March 31, 2025. Artist services and expanded-rights revenue increased by $47 million, or 40%, due to higher concert promotion revenue primarily in France, higher merchandising revenue, and a favorable impact of foreign currency exchange rates of $6 million. Physical revenue increased by $25 million, or 22%, primarily driven by strong releases in the quarter as well as catalog and carryover success, and a favorable impact of foreign currency exchange rates of $4 million. Licensing revenue decreased by $1 million, or 1%. Top sellers in the quarter included Bruno Mars, Alex Warren, sombr, Ed Sheeran and Melanie Martinez.

Current wording

The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights and physical revenues. Digital revenue increased by $87 million, or 9%, which includes a favorable impact of currency exchange fluctuations of $14 million, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription and ad-supported revenues. Adjusted for the impacts of the Copyright Settlement and BMG Termination in the prior-year quarter, digital revenue increased $113 million, or 13%. Revenue from streaming services increased by $106 million, or 12%, to $1,001 million for the three months ended June 30, 2026 from $895 million for the three months ended June 30, 2025. Adjusted for the impact of the BMG Termination in the prior-year quarter, Recorded Music streaming revenue increased $116 million, or 13%. Download and other digital revenues decreased by $19 million, or 56%, to $15 million for the three months ended June 30, 2026 from $34 million for the three months ended June 30, 2025, primarily due to the $16 million impact of the Copyright Settlement in the prior-year quarter. Artist services and expanded-rights revenue increased by $29 million, or 15%, due to higher concert promotion revenue primarily in Japan and higher merchandising revenue. Physical revenue increased by $18 million, or 15%, primarily driven by strong releases in the quarter as well as catalog and carryover success, partially offset by an unfavorable impact of foreign currency exchange rates of $2 million. Licensing revenue remained constant for each of the three months ended June 30, 2026 and June 30, 2025. Top sellers in the quarter included Bruno Mars, Don Toliver, sombr, Alex Warren and Madonna.

Previous wording

The overall increase in Music Publishing revenue was driven by increases in digital, performance, synchronization, and mechanical revenues. Digital revenue increased by $36 million, or 19%, driven by an increase in streaming revenue. Revenue from streaming services grew by $37 million, or 20%, to $222 million for the three months ended March 31, 2026 from $185 million for the three months ended March 31, 2025, driven by the impact of new deals and renewals, continued market growth and a favorable impact of foreign currency exchange rates of $6 million. Performance revenue increased by $5 million, or 9%, driven by growth from touring and live events primarily in Europe, and a favorable impact of foreign currency exchange rates of $3 million. Synchronization revenue increased by $1 million, or 2%, attributable to a favorable impact of foreign currency exchange rates of $2 million. Mechanical revenue increased by $1 million, or 6%, driven by the timing of distributions.

Current wording

The overall increase in Music Publishing revenue was driven by increases in digital, synchronization, mechanical, and performance revenues. Digital revenue increased by $31 million, or 15%, driven by an increase in streaming revenue. Revenue from streaming services grew by $29 million, or 14%, to $231 million for the three months ended June 30, 2026 from $202 million for the three months ended June 30, 2025, driven by continued market growth and the impact of new deals and renewals. Synchronization revenue increased by $6 million, or 11%, attributable to an increase in other copyright infringement settlements of approximately $6 million, and a favorable impact of foreign currency exchange rates of $2 million. Mechanical revenue increased by $3 million, or 19%, driven by the timing of distributions. Performance revenue increased by $1 million, or 2%, which includes a favorable impact of foreign currency exchange rates of $2 million.

Previous wording

U.S. revenue increased by $85 million, or 13%, to $743 million for the three months ended March 31, 2026 from $658 million for the three months ended March 31, 2025. U.S. Recorded Music revenue increased by $68 million, or 14%. U.S. Recorded Music digital revenue increased by $29 million, or 8%, driven by higher streaming revenue of $31 million, or 8%, including the impact of the BMG Termination in the prior-year quarter. U.S. Recorded Music licensing revenue increased by $2 million, or 5%, driven by higher copyright infringement settlements. U.S. Recorded Music physical revenue increased $23 million, or 43%, driven by strong releases in the quarter as well as catalog and carryover success. U.S. Recorded Music artist services and expanded-rights revenues increased by $14 million, or 61%, driven by higher merchandising revenue. U.S. Music Publishing revenue increased by $17 million, or 11%, to $178 million for the three months ended March 31, 2026 from $161 million for the three months ended March 31, 2025. U.S. Music Publishing digital revenue increased by $18 million, or 17%, attributable to higher streaming revenue of $19 million, or 18%. U.S. Music Publishing synchronization revenue increased by $3 million, or 10%, driven by timing of certain copyright infringement settlements and the impact of acquisitions. U.S. Music Publishing performance decreased by $3 million, or 16%, and mechanical revenue decreased by $1 million driven by the timing of distributions.

Current wording

U.S. revenue increased by $59 million, or 8%, to $781 million for the three months ended June 30, 2026 from $722 million for the three months ended June 30, 2025. U.S. Recorded Music revenue increased by $51 million, or 10%. U.S. Recorded Music digital revenue increased by $14 million, or 3%, driven by higher streaming revenue of $31 million, or 8%, partially offset by the impacts of the Copyright Settlement of $16 million and the BMG Termination of $7 million in the prior-year quarter. U.S. Recorded Music licensing revenue increased by $9 million, or 26%, driven by higher copyright infringement settlements of $5 million. U.S. Recorded Music physical revenue increased $21 million, or 45%, driven by strong releases in the quarter as well as catalog and carryover success. U.S. Recorded Music artist services and expanded-rights revenues increased by $7 million, or 16%, driven by higher merchandising revenue of approximately $12 million. U.S. Music Publishing revenue increased by $8 million, or 4%, to $194 million for the three months ended June 30, 2026 from $186 million for the three months ended June 30, 2025. U.S. Music Publishing digital revenue increased by $7 million, or 6%, attributable to higher streaming revenue of $7 million, or 6%. U.S. Music Publishing synchronization revenue increased by $3 million, or 8%, driven by timing of certain copyright infringement settlements. U.S. Music Publishing performance decreased by $2 million, or 10%, and mechanical revenue increased by $1 million, or 33%.

Previous wording

International revenue increased by $163 million, or 20%, to $990 million for the three months ended March 31, 2026 from $827 million for the three months ended March 31, 2025. Excluding the favorable impact of foreign currency exchange rates of $62 million, International revenue increased by $101 million, or 11%. International Recorded Music revenue increased by $137 million, which includes a favorable impact of foreign currency exchange rates of $50 million, driven by growth across digital, artist services and expanded rights and physical revenues, partially offset by a decrease in licensing revenue. International Recorded Music digital revenue increased by $105 million, attributable to higher streaming revenue of $105 million, or 23%, which includes the impacts of the DSP True-Up and Settlement Payments and the BMG Termination in the prior-year quarter, and a favorable impact of foreign currency exchange rates of $32 million. International Recorded Music artist services and expanded-rights revenue increased by $33 million, or 35%, driven by higher concert promotion revenue primarily in France, and the favorable impact of foreign currency exchange rates of $6 million. International Recorded Music physical revenue increased by $2 million driven by the favorable impact of foreign currency exchange rates of $4 million. These increases were partially offset by a decrease in licensing revenue of $3 million, or 4%. International Music Publishing revenue increased by $26 million, or 17%, to $175 million for the three months ended March 31, 2026 from $149 million for the three months ended March 31, 2025. International Music Publishing revenue growth was driven by increases in digital revenue of $18 million due to growth in streaming, performance revenue of $8 million due to growth from concerts and live events primarily in Europe, and mechanical revenue of $2 million driven by the timing of distributions. Synchronization revenue decreased by $2 million, or 10%.

Current wording

International revenue increased by $116 million, or 12%, to $1,084 million for the three months ended June 30, 2026 from $968 million for the three months ended June 30, 2025. Excluding the favorable impact of foreign currency exchange rates of $17 million, international revenue increased by $99 million, or 10%. International Recorded Music revenue increased by $83 million, which includes a favorable impact of foreign currency exchange rates of $13 million, driven by growth across digital and artist services and expanded rights, partially offset by decreases in licensing and physical revenues. International Recorded Music digital revenue increased by $73 million, attributable to higher streaming revenue of $75 million, or 15%, and a favorable impact of foreign currency exchange rates of $14 million, partially offset by the impact of the BMG Termination of $3 million in the prior-year quarter. International Recorded Music artist services and expanded-rights revenue increased by $22 million, or 14%, driven by higher concert promotion revenue primarily in Japan. These increases were partially offset by a decrease in licensing revenue of $9 million, or 12%, and a decrease in physical revenue of $3 million driven by the unfavorable impact of foreign currency exchange rates of $2 million. International Music Publishing revenue increased by $33 million, or 22%, to $183 million for the three months ended June 30, 2026 from $150 million for the three months ended June 30, 2025. International Music Publishing revenue growth was driven by increases in digital revenue of $24 million due to growth in streaming of $22 million, mechanical revenue of $2 million driven by the timing of distributions, performance revenue of $3 million, or 8%, and synchronization revenue of $3 million, or 18%.

Previous wording

Artist and repertoire costs increased by $86 million, to $617 million for the three months ended March 31, 2026 from $531 million for the three months ended March 31, 2025. Artist and repertoire costs as a percentage of revenue remained constant at 36% for each of the three months ended March 31, 2026 and March 31, 2025.

Current wording

Artist and repertoire costs increased by $69 million, to $653 million for the three months ended June 30, 2026 from $584 million for the three months ended June 30, 2025. Artist and repertoire costs as a percentage of revenue remained constant at 35% for each of the three months ended June 30, 2026 and June 30, 2025.

Previous wording

Product costs increased by $53 million, to $313 million for the three months ended March 31, 2026 from $260 million for the three months ended March 31, 2025. Product costs as a percentage of revenue remained constant at 18% for each of the three months ended March 31, 2026 and March 31, 2025.

Current wording

Product costs increased by $28 million, to $357 million for the three months ended June 30, 2026 from $329 million for the three months ended June 30, 2025. Product costs as a percentage of revenue remained constant at 19% for each of the three months ended June 30, 2026 and June 30, 2025.

Previous wording

Total selling, general and administrative expense increased by $10 million, to $460 million for the three months ended March 31, 2026 from $450 million for the three months ended March 31, 2025, primarily driven by unfavorable movements in foreign currency exchange rates of $12 million. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 27% for the three months ended March 31, 2026 from 30% for the three months ended March 31, 2025 due to the factors noted below.

Current wording

Total selling, general and administrative expense decreased by $7 million, to $464 million for the three months ended June 30, 2026 from $471 million for the three months ended June 30, 2025, primarily driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of $3 million. Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 25% for the three months ended June 30, 2026 from 28% for the three months ended June 30, 2025 due to the factors noted below.

Previous wording

General and administrative expense decreased by $13 million to $263 million for the three months ended March 31, 2026 from $276 million for the three months ended March 31, 2025. The decrease in general and administrative expense was primarily driven by cost savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher depreciation expense of $3 million due to the core financials component of our new technology platform being placed into service. Expressed as a percentage of revenue, general and administrative expense decreased to 15% for the three months ended March 31, 2026 compared to 19% for the three months ended March 31, 2025.

Current wording

General and administrative expense decreased by $18 million to $264 million for the three months ended June 30, 2026 from $282 million for the three months ended June 30, 2025. The decrease in general and administrative expense was primarily driven by cost savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher depreciation expense of $4 million due to the core financials component of our new technology platform being placed into service. Expressed as a percentage of revenue, general and administrative expense decreased to 14% for the three months ended June 30, 2026 compared to 17% for the three months ended June 30, 2025.

Previous wording

Selling and marketing expense increased by $10 million, or 6%, to $167 million for the three months ended March 31, 2026 from $157 million for the three months ended March 31, 2025. Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the three months ended March 31, 2026 from 11% for the three months ended March 31, 2025 due to savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.

Current wording

Selling and marketing expense decreased by $3 million, or 2%, to $164 million for the three months ended June 30, 2026 from $167 million for the three months ended June 30, 2025. Expressed as a percentage of revenue, selling and marketing expense decreased to 9% for the three months ended June 30, 2026 from 10% for the three months ended June 30, 2025 due to savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by higher marketing and advertising spend for key releases.

Previous wording

Distribution expense increased by $13 million to $30 million for the three months ended March 31, 2026 from $17 million for the three months ended March 31, 2025. Expressed as a percentage of revenue, distribution expense increased to 2% for the three months ended March 31, 2026 compared to 1% for the three months ended March 31, 2025, driven by higher physical and merchandising revenues.

Current wording

Distribution expense increased by $14 million to $36 million for the three months ended June 30, 2026 from $22 million for the three months ended June 30, 2025. Expressed as a percentage of revenue, distribution expense increased to 2% for the three months ended June 30, 2026 compared to 1% for the three months ended June 30, 2025, driven by higher physical and merchandising revenues.

Previous wording

Adjusted OIBDA increased by $94 million to $397 million for the three months ended March 31, 2026 from $303 million for the three months ended March 31, 2025, driven by the impact of the DSP True-Up and Settlement Payments of $7 million and the BMG Termination of $1 million in the prior-year quarter, as well as revenue mix and savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by unfavorable movements in foreign currency exchange rates of approximately $13 million. Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 23% for the three months ended March 31, 2026 from 20% for the three months ended March 31, 2025.

Current wording

Adjusted OIBDA increased by $60 million to $433 million for the three months ended June 30, 2026 from $373 million for the three months ended June 30, 2025, driven by strong operating performance, revenue mix and savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by the impact of the Copyright Settlement of $9 million and the BMG Termination of $1 million in the prior-year quarter and unfavorable movements in foreign currency exchange rates of approximately $16 million. Expressed as a percentage of total revenue, Adjusted OIBDA margin increased to 23% for the three months ended June 30, 2026 from 22% for the three months ended June 30, 2025.

Previous wording

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

Current wording

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

Previous wording

Our restructuring and impairment charges decreased to $6 million for the three months ended March 31, 2026 from $13 million for the three months ended March 31, 2025. The three months ended March 31, 2026 includes an impairment charge of $2 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025.

Current wording

Our restructuring and impairment charges decreased to $7 million for the three months ended June 30, 2026 from $69 million for the three months ended June 30, 2025. The three months ended June 30, 2026 includes an additional impairment charge of $3 million for long-lived assets associated with EMP, which was the result of remeasuring the carrying value to fair value as it has been classified as held for sale since September 30, 2025. The three months ended June 30, 2025 includes the initial impairment charge of $70 million for long-lived assets associated with EMP.

Previous wording

Our depreciation expense increased by $3 million to $31 million for the three months ended March 31, 2026 from $28 million for the three months ended March 31, 2025. The increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.

Current wording

Our depreciation expense increased by $4 million to $33 million for the three months ended June 30, 2026 from $29 million for the three months ended June 30, 2025. The increase is primarily driven by the core financials and global revenue solution components of our new technology platform being placed into service.

Previous wording

Our amortization expense increased by $10 million, to $72 million for the three months ended March 31, 2026 from $62 million for the three months ended March 31, 2025. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by EMP intangible assets, which have been classified as held for sale.

Current wording

Our amortization expense increased by $11 million, to $78 million for the three months ended June 30, 2026 from $67 million for the three months ended June 30, 2025. The increase is driven by incremental amortization related to acquisitions of music-related assets, partially offset by a decrease of approximately $1 million from the classification of EMP intangible assets as held for sale.

Previous wording

Our operating income increased by $96 million to $264 million for the three months ended March 31, 2026 from $168 million for the three months ended March 31, 2025, primarily due to the factors impacting Adjusted OIBDA described above and a decrease in restructuring and impairment charges of $7 million. The increase in operating income was partially offset by higher amortization expenses of $10 million for the three months ended March 31, 2026.

Current wording

Our operating income increased by $136 million to $305 million for the three months ended June 30, 2026 from $169 million for the three months ended June 30, 2025, primarily due to the factors impacting Adjusted OIBDA described above and a decrease in restructuring and impairment charges of $62 million. The increase in operating income was partially offset by higher amortization expenses of $11 million for the three months ended June 30, 2026.

Previous wording

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

Current wording

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

Previous wording

Other income for the three months ended March 31, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $22 million and a currency exchange gain on intercompany loans of $12 million. This compares to foreign currency losses on our Euro-denominated debt of $34 million, currency exchange losses on our intercompany loans of $27 million, and realized and unrealized losses on hedging activity of $6 million for the three months ended March 31, 2025.

Current wording

Other income for the three months ended June 30, 2026 primarily includes foreign currency gains on our Euro-denominated debt of $3 million, a currency exchange loss on intercompany loans of $1 million, and a realized and unrealized loss on hedging activity of $1 million. This compares to foreign currency losses on our Euro-denominated debt of $70 million, currency exchange losses on our intercompany loans of $63 million, and realized and unrealized losses on hedging activity of $8 million for the three months ended June 30, 2025.

Previous wording

Our income tax expense increased by $26 million to $144 million for the six months ended March 31, 2026 from $118 million for the six months ended March 31, 2025. The increase of $26 million in income tax expense is primarily due to an increase in pretax income in the current year and a taxable gain on the Company’s sale of certain recorded music catalog rights to Beethoven JV, partially offset by the tax benefit associated with partial release of valuation allowance on EMP.

Current wording

Our income tax expense increased by $62 million to $67 million for the three months ended June 30, 2026 from $5 million for the three months ended June 30, 2025. The increase of $62 million in income tax expense is primarily due to an increase in pre-tax income in the quarter and a $20 million smaller benefit from EMP impairment in the current year quarter.

Previous wording

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

Current wording

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

Previous wording

There was income attributable to noncontrolling interest of $2 million during the three months ended March 31, 2026. There was no loss or income attributable to noncontrolling interest for the three months ended March 31, 2025.

Current wording

There was income attributable to noncontrolling interest of $4 million during the three months ended June 30, 2026. There was no loss or income attributable to noncontrolling interest for the three months ended June 30, 2025.

Previous wording

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

Current wording

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

Previous wording

Recorded Music cost of revenues increased by $108 million, to $707 million for the three months ended March 31, 2026 from $599 million for the three months ended March 31, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 29% for each of the three months ended March 31, 2026 and March 31, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs increased to 23% for the three months ended March 31, 2026 from 22% for the three months ended March 31, 2025, driven by revenue and deal mix.

Current wording

Recorded Music cost of revenues increased by $71 million, to $777 million for the three months ended June 30, 2026 from $706 million for the three months ended June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music artist and repertoire costs remained constant at 28% for each of the three months ended June 30, 2026 and June 30, 2025. Expressed as a percentage of Recorded Music revenue, Recorded Music product costs remained constant at 24% for each of the three months ended June 30, 2026 and June 30, 2025.

Previous wording

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

Current wording

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

Previous wording

Recorded Music selling, general and administrative expense increased by $15 million, to $342 million for the three months ended March 31, 2026 from $327 million for the three months ended March 31, 2025, primarily driven by unfavorable movements in foreign currency exchange rates of $12 million. The decrease in general and administrative expense was largely driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business. The increase in selling and marketing expense was driven by higher variable marketing spend for key releases. The increase in distribution expense was primarily driven by revenue mix from higher merchandising and physical revenues. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 25% for the three months ended March 31, 2026 from 28% for the three months ended March 31, 2025.

Current wording

Recorded Music selling, general and administrative expense decreased by $9 million, to $336 million for the three months ended June 30, 2026 from $345 million for the three months ended June 30, 2025,which includes unfavorable movements in foreign currency exchange rates of $2 million. The decreases in general and administrative expense and selling and marketing expense were largely driven by cost savings from the Company’s restructuring plans, a portion of which has been reinvested into the Company’s business. The decrease in selling and marketing expense was partially offset by higher variable marketing spend for key releases. The increase in distribution expense was primarily driven by revenue mix from higher merchandising and physical revenues. Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 23% for the three months ended June 30, 2026 from 25% for the three months ended June 30, 2025.

Previous wording

Recorded Music operating income increased by $85 million to $288 million for the three months ended March 31, 2026 from $203 million for the three months ended March 31, 2025. In addition to the factors impacting Adjusted OIBDA described below, the increase in operating income was driven by decreases in restructuring and impairment charges of $7 million and depreciation expense of $3 million compared to the prior-year quarter, partially offset by higher amortization expenses of $4 million related to acquisitions of music-related assets.

Current wording

Recorded Music operating income increased by $125 million to $326 million for the three months ended June 30, 2026 from $201 million for the three months ended June 30, 2025. In addition to the factors impacting Adjusted OIBDA described below, the increase in operating income was driven by decreases in restructuring and impairment charges of $63 million and depreciation expense of $4 million compared to the prior-year quarter, partially offset by higher amortization expenses of $10 million related to acquisitions of music-related assets.

Previous wording

Recorded Music Adjusted OIBDA increased by $76 million to $346 million for the three months ended March 31, 2026 from $270 million for the three months ended March 31, 2025, largely driven by savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by the impact of the DSP True-Up and Settlement Payments of $7 million and the BMG Termination of $1 million in the prior-year quarter, as well as unfavorable movements in foreign currency exchange rates of approximately $9 million. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 25% for the three months ended March 31, 2026 from 23% for the three months ended March 31, 2025 due to the factors noted above.

Current wording

Recorded Music Adjusted OIBDA increased by $56 million to $377 million for the three months ended June 30, 2026 from $321 million for the three months ended June 30, 2025, largely driven by strong operating performance and revenue growth, and savings from the Company’s restructuring plans, of which a portion has been reinvested in the Company’s business, partially offset by the impact of the Copyright Settlement of $9 million and the BMG Termination of $1 million in the prior-year quarter and unfavorable movements in foreign currency exchange rates of approximately $12 million. Expressed as a percentage of Recorded Music revenue, Recorded Music Adjusted OIBDA margin increased to 25% for the three months ended June 30, 2026 from 24% for the three months ended June 30, 2025 due to the factors noted above.

Previous wording

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

Current wording

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

Previous wording

Music Publishing operating income increased by $9 million to $61 million for the three months ended March 31, 2026 from $52 million for the three months ended March 31, 2025. The increase is driven by the same factors affecting Adjusted OIBDA discussed below, as well as lower depreciation expenses of $2 million, partially offset by an increase in amortization expense of $6 million related to the impact of acquisitions.

Current wording

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

Previous wording

Music Publishing Adjusted OIBDA increased by $12 million, or 14%, to $97 million for the three months ended March 31, 2026 from $85 million for the three months ended March 31, 2025, primarily driven by revenue growth and strong operating performance, as well as savings from the Company’s restructuring plans, a portion of which has been reinvested in the Company’s business, partially offset by unfavorable movements in foreign exchange rates of approximately $4 million. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 27% for each of the three months ended March 31, 2026 and March 31, 2025.

Current wording

Music Publishing Adjusted OIBDA increased by $13 million, or 14%, to $109 million for the three months ended June 30, 2026 from $96 million for the three months ended June 30, 2025, primarily driven by revenue growth and strong operating performance, partially offset by unfavorable movements in foreign currency exchange rates of approximately $5 million. Expressed as a percentage of Music Publishing revenue, Music Publishing Adjusted OIBDA margin remained constant at 29% for each of the three months ended June 30, 2026 and June 30, 2025.

Previous wording

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

Current wording

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