10q10k10q10k.net

What changed in Warner Music Group Corp.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Warner Music Group Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+492 added−570 removedSource: 10-K (2025-11-20) vs 10-K (2024-11-21)

Top changes in Warner Music Group Corp.'s 2025 10-K

492 paragraphs added · 570 removed · 397 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

110 edited+32 added−35 removed111 unchanged
Biggest changeOur Music Publishing business includes musical compositions by: • Superstars such as Anderson Paak, Belly, Bruno Mars, Cardi B, Chris Stapleton, Damon Albarn, Dan + Shay, Dave Mustaine, Deftones, Dua Lipa, Green Day, Imagine Dragons, Kacey Musgraves, Katy Perry, Lil Uzi Vert, Lil Wayne, Lizzo, Madonna, Pablo Alborán, Radiohead, Tayla Parx, Teddy Swims, Tom Petty, Tones and I, and William Corgan. • International talent such as Aya Nakamura, Angèle, Bausa, Danna Paola, Jack & Coke, Joaquin Sabina, Jonathan Lee, Manuel Medrano, Marco Borreo, Melendi, MZMC, Raye, Shy’m, Stromae, and Tove Lo. • Songwriting icons like Amy Allen, Brody Brown, busbee, Cole Porter, David Bowie, Eric Clapton, Gamble & Huff, George & Ira Gershwin, George Michael, Grateful Dead, Justin Tranter, Led Zeppelin, Lin Manuel Miranda, Liz Rose, Marco Antonio Solís, Mick Jones, Quincy Jones, Stephen Sondheim and Zach Bryan . 18 Competition In our Recorded Music and Music Publishing businesses, we compete based on marketing (including both how we allocate our marketing resources as well as how much we spend on a dollar basis) and on recording artist and songwriter signings.
Biggest changeOur Music Publishing business includes musical compositions by: • Superstars such as Anderson Paak, Benson Boone, Bruno Mars, Cardi B, Dan + Shay, Dave Mustaine, Deftones, Dua Lipa, Green Day, Imagine Dragons, Kacey Musgraves, Katy Perry, Laufey, Lil Uzi Vert, Lil Wayne, Lizzo, Madonna, Pablo Alborán, Radiohead, Tayla Parx, Teddy Swims, Tom Petty, Tones and I, William Corgan, and Zach Bryan. • International talent such as Aya Nakamura, Angèle, Bausa, Danna Paola, Jack & Coke, Joaquin Sabina, Jonathan Lee, Man á, Manuel Medrano, Melendi, MZMC, Raye, Shy’m, Stromae, and Tove Lo. • Songwriting icons like Amy Allen, Belly, Cole Porter, Chris Stapleton, David Bowie, Eric Clapton, Gamble & Huff, George & Ira Gershwin, George Michael, Grateful Dead, Justin Tranter, Led Zeppelin, Lin Manuel Miranda, Liz Rose, Marco Antonio Solís, Marco Borrero, Mick Jones, Quincy Jones, and Stephen Sondheim.
Examples of music uses that generate music publishing revenues include: Performance: performance of the song to the general public • Broadcast of musical compositions on television, radio and cable • Live performance at a concert or other venue (e.g., arena concerts, nightclubs) • Broadcast of musical compositions at sporting events, restaurants or bars • Performance of musical compositions in staged theatrical productions Digital: licensing of recorded music in various digital formats and digital performance of musical compositions to the general public • Streaming and download services • Social media and short-form video platforms • Graphic design and editing software and other creator tools Mechanical: sale of recorded music in various physical formats • Vinyl, CDs and DVDs Synchronization: use of the musical composition in combination with visual images • Films or television programs • Television commercials • Video games • Merchandising, toys or novelty items Other: • Licensing of copyrights for use in printed sheet music In the United States, mechanical royalties are collected directly by music publishers, from recorded music companies, via The Harry Fox Agency, a non-exclusive licensing agent affiliated with the Society of European Stage Authors and Composers (“SESAC”), or The Mechanical Licensing Collective (“The MLC”), while outside the United States, mechanical royalties are collected directly by music publishers or from collecting societies.
Examples of music uses that generate music publishing revenues include: Performance: performance of the song to the general public • Broadcast of musical compositions on television, radio and cable • Live performance at a concert or other venue (e.g., arena concerts, nightclubs) • Broadcast of musical compositions at sporting events, restaurants or bars • Performance of musical compositions in staged theatrical productions Digital: licensing of recorded music in various digital formats and digital performance of musical compositions to the general public • Streaming and download services • Social media and short-form video platforms • Graphic design and editing software and other creator tools Mechanical: sale of recorded music in various physical formats • Vinyl, CDs and DVDs Synchronization: use of the musical composition in combination with visual images • Films or television programs • Television commercials • Video games • Merchandising, toys or novelty items Other: • Licensing of copyrights for use in printed sheet music 15 In the United States, mechanical royalties are collected directly by music publishers, from recorded music companies, via The Harry Fox Agency, a non-exclusive licensing agent affiliated with the Society of European Stage Authors and Composers (“SESAC”), or The Mechanical Licensing Collective (“The MLC”), while outside the United States, mechanical royalties are collected directly by music publishers or from collecting societies.
We also conduct our Recorded 12 Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, Warner Classics and Warner Music Nashville. Outside the United States, our Recorded Music business is conducted through various subsidiaries, affiliates and non-affiliated licensees.
We also conduct our Recorded Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, Warner Classics and Warner Records Nashville. Outside the United States, our Recorded Music business is conducted through various subsidiaries, affiliates and non-affiliated licensees.
Our goal is to maximize the likelihood of success for new releases as well as to stimulate the success of catalog releases. We seek to increase the value of music and help our recording artists connect with their fans. The marketing and promotion of recorded music is carefully coordinated to create the greatest sales momentum, while maintaining financial discipline.
Our goal is to maximize the likelihood of success for new releases as well as to stimulate the success of catalog releases. We seek to increase the value of music and help our recording artists connect with their fans. 13 The marketing and promotion of recorded music is carefully coordinated to create the greatest sales momentum, while maintaining financial discipline.
We then provide digital assets for our music to these services in an accessible form. Our agreements with these services establish our fees for the distribution of our music, which vary based on the service. We typically receive accounting from these services on a monthly basis, detailing the distribution activity, with payments rendered on a monthly basis.
We then provide digital assets for our music to these services in an accessible form. Our agreements with these services establish our fees for the distribution of our music, which vary based on the service. We typically receive accounting from these services on a monthly basis, detailing the distribution activity, with payments generally rendered on a monthly basis.
Throughout the world, each synchronization license is generally subject to negotiation with a prospective 15 licensee and, by contract, music publishers pay a contractually required percentage of synchronization income to the songwriters or their heirs and to any co-publishers or other rightsholders.
Throughout the world, each synchronization license is generally subject to negotiation with a prospective licensee and, by contract, music publishers pay a contractually required percentage of synchronization income to the songwriters or their heirs and to any co-publishers or other rightsholders.
The duration of copyright protection for such sound recordings varies based on the year of publication, with all such sound recordings receiving copyright protection for at least 95 years, and sound recordings published between January 1, 1957 and February 15, 1972 receiving copyright protection until February 15, 2067.
The duration of copyright protection for such 18 sound recordings varies based on the year of publication, with all such sound recordings receiving copyright protection for at least 95 years, and sound recordings published between January 1, 1957 and February 15, 1972 receiving copyright protection until February 15, 2067.
Rhino Entertainment also releases new music from legacy recording artists and markets and promotes the name and likeness of certain artist estates and brands. 13 Recording Artists’ Contracts Our recording artists’ contracts define the commercial relationship between our recording artists and our record labels.
Rhino Entertainment also releases new music from legacy recording artists and markets and promotes the name and likeness of certain artist estates and brands. Recording Artists’ Contracts Our recording artists’ contracts define the commercial relationship between our recording artists and our record labels.
It is not unusual for us to renegotiate contract terms with a successful artist during the term of their existing contracts, sometimes in return for an increase in the number of albums that the artist is required to deliver.
It is not unusual for us to renegotiate terms with a successful artist during the term of their existing contracts, sometimes in return for an increase in the number of albums that the artist is required to deliver.
Many of the recording contracts we currently enter into are expanded-rights deals, in which we share in the touring, merchandising, sponsorship, fan club or other ancillary music revenues associated with those artists.
Many of the recording contracts we enter into are expanded-rights deals, in which we share in the touring, merchandising, sponsorship, fan club or other ancillary music revenues associated with those artists.
In advance of trial, the National Music Publishers’ Association, the Nashville Songwriters Associations International and the Digital Media Association announced a settlement regarding the U.S. mechanical streaming rates for 2023-2027.
In advance of trial, the National Music Publishers’ Association, the Nashville Songwriters Associations International and the Digital Media Association announced a settlement regarding the U.S. mechanical streaming rates for 2023 through 2027.
Assembled over decades, our award-winning catalog includes over 180,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel. Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios.
Assembled over decades, our award-winning catalog includes over 190,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel. Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios.
With over $5.2 billion in annual recorded music revenues, over half of which are generated outside of the United States, we believe our platform is differentiated by the scale, reach and broad appeal of our music. Our collection of owned and controlled recordings and musical compositions, spanning a large variety of genres and geographies over many decades, cannot be replicated.
With over $5.4 billion in annual recorded music revenues, over half of which are generated outside of the United States, we believe our platform is differentiated by the scale, reach and broad appeal of our music. Our collection of owned and controlled recordings and musical compositions, spanning a large variety of genres and geographies over many decades, cannot be replicated.
Also as part of the Phonorecords IV Proceeding, beginning on January 1, 2023, the mechanical 9 royalty rates for physical phonorecords and permanent downloads increased to $0.12 per copy or $0.0231 per minute of playing time or fraction thereof, and include inflation-based adjustments for subsequent years of the rate period. European Union Copyright Directive.
Also as part of the Phonorecords IV Proceeding, beginning on January 1, 2023, the mechanical royalty rates for physical phonorecords and permanent downloads increased to $0.12 per copy or $0.0231 per minute of playing time or fraction thereof, and include inflation-based adjustments for subsequent years of the rate period. 8 European Union Copyright Directive.
According to Music & Copyright, in 2023, the three largest recorded music companies were Universal Music Group, Sony Music Entertainment and us, which collectively accounted for approximately 70% of global recorded music revenues. There are many mid-sized and smaller players in the industry that accounted for the remaining approximately 30%, including independent recorded music companies.
According to Music & Copyright, in 2024, the three largest recorded music companies were Universal Music Group, Sony Music Entertainment and us, which collectively accounted for approximately 70% of global recorded music revenues. There are many mid-sized and smaller players in the industry that accounted for the remaining approximately 30%, including independent recorded music companies.
According to Music & Copyright, Sony Music Publishing was the market leader in music publishing in 2023 with an approximately 25% share (reflecting its ownership of the EMI music publishing assets). Universal Music Publishing was the second-largest music publisher with an approximately 23% share, followed by us at approximately 12%.
According to Music & Copyright, Sony Music Publishing was the market leader in music publishing in 2024 with an approximately 25% share (reflecting its ownership of the EMI music publishing assets). Universal Music Publishing was the second-largest music publisher with an approximately 23% share, followed by us at approximately 12%.
Music Publishing (19%, 18% and 16% of consolidated revenues, before intersegment eliminations, for each of the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, respectively) While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself.
Music Publishing (19%, 19% and 18% of consolidated revenues, before intersegment eliminations, for each of the fiscal years ended September 30, 2025, September 30, 2024 and September 30, 2023, respectively) While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself.
Our business’ distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors; and various distribution centers and ventures operated internationally.
Our business’s distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors; and various distribution centers and ventures operated internationally.
The acquisition of PLG in 2013 significantly strengthened our worldwide roster, global footprint and executive talent, particularly in Europe, the acquisition of Spinnin’ Records in 2017 added one of the world’s leading independent electronic music companies, the acquisition of 300 Entertainment in 2022 strengthened and diversified our roster by adding a hip-hop focused label and our joint venture with 10K Projects in 2023 brought a new roster and next generation team into the fold.
The acquisition of PLG in 2013 significantly strengthened our worldwide roster, global footprint and executive talent, particularly in Europe; the acquisition of Spinnin’ Records in 2017 added one of the world’s leading independent electronic music companies; the acquisition of 300 Entertainment in 2022 strengthened and diversified our roster by adding a hip-hop focused label; and our joint venture with 10K Projects in 2023 and subsequent acquisition of the remaining interest in 2025 brought a new roster and next generation team into the fold.
Recorded Music (81%, 82% and 84% of consolidated revenues, before intersegment eliminations, for each of the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, respectively) Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists.
Recorded Music (81%, 81% and 82% of consolidated revenues, before intersegment eliminations, for each of the fiscal years ended September 30, 2025, September 30, 2024 and September 30, 2023, respectively) Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists.
There are also rates set for interactive streaming and non-permanent downloads based on a formula that takes into account revenues paid by consumers or advertisers with certain minimum royalties that may apply depending on the type of service. For 2024, the headline mechanical royalty rate for interactive streaming is 15.2% of revenue, increasing by annual increments to 15.35% in 2027.
There are also rates set for interactive streaming and non-permanent downloads based on a formula that takes into account revenues paid by consumers or advertisers with certain minimum royalties that may apply depending on the type of service. For 2025, the headline mechanical royalty rate for interactive streaming is 15.25% of revenue, increasing by annual increments to 15.35% in 2027.
Human Capital As of September 30, 2024, we employed approximately 5,800 persons worldwide, including temporary and part-time employees as well as employees that were added through acquisitions. As of such date, none of our employees in the United States were subject to a collective bargaining agreement, although certain employees in our non-domestic companies were covered by national labor agreements.
Human Capital As of September 30, 2025, we employed approximately 5,500 persons worldwide, including temporary and part-time employees as well as employees that were added through acquisitions. As of such date, none of our employees in the United States were subject to a collective bargaining agreement, although certain employees in our non-domestic companies were covered by national labor agreements.
In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels. Our Recorded Music business’ operations include WMX, a new generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways.
In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels. Our Recorded Music business’s operations include WMX, a next generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways.
Information on, or accessible through, our website or any other website is not incorporated by reference herein. All website addresses in this Annual Report are intended to be inactive textual references only.
Our website is www.wmg.com. Information on, or accessible through, our website or any other website is not incorporated by reference herein. All website addresses in this Annual Report are intended to be inactive textual references only.
We continually invest in our employees’ career growth and provide employees with a wide range of development opportunities, including learning, mentoring, coaching and development programs. Corporate Information Warner Music Group Corp. is a Delaware corporation. Our principal executive offices are located at 1633 Broadway, New York, New York 10019, and our telephone number is (212) 275-2000. Our website is www.wmg.com.
We continually invest in our employees’ career growth and provide employees with a wide range of development opportunities, including learning, mentoring, coaching and development programs. 19 Corporate Information Warner Music Group Corp. is a Delaware corporation. Our principal executive offices are located at 1633 Broadway, New York, New York 10019, and our telephone number is (212) 275-2000.
Our major trademarks include 300 Entertainment, ADA, Asylum, Atlantic, East West, Elektra, EMP, Erato, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, Songkick, SPINNIN’ RECORDS and Warner Chappell, and their respective logos. We also use certain trademarks pursuant to a royalty-free license agreement.
Our major trademarks include ADA, Asylum, Atlantic, East West, Elektra, Erato, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, SPINNIN’ RECORDS and Warner Chappell, and their respective logos. We also use certain trademarks pursuant to a royalty-free license agreement.
We believe we will benefit from the growth in international markets due to our local A&R focus, as well as our local and global marketing and distribution infrastructure that includes a network of subsidiaries, affiliates, and non-affiliated licensees and sub-publishers in more than 70 countries. We are developing local talent to achieve regional, national and international success.
We believe we will continue to benefit from the growth in international markets due to our local A&R focus, as well as our local and global marketing and distribution infrastructure that includes a network of subsidiaries, affiliates, and non-affiliated licensees and sub-publishers. We are developing local talent to achieve regional, national and international success.
For example, we quickly honed our expertise in securing placement on playlists and other valuable positioning on digital music services. Global Reach and Local Expertise As of September 30, 2024, we employed approximately 5,800 persons around the world.
For example, we quickly honed our expertise in securing placement on playlists and other valuable positioning on digital music services. Global Reach and Local Expertise As of September 30, 2025, we employed approximately 5,500 persons around the world.
The potential of global paid streaming subscriber growth is demonstrated by the penetration rates in early adopter markets. Approximately 63% of the population in Sweden, where Spotify was founded, was estimated to be paid music subscribers in 2024, according to Goldman Sachs.
The potential of global paid streaming subscriber growth is demonstrated by the penetration rates in early adopter markets. Approximately 67% of the population in Sweden, where Spotify was founded, was estimated to be paid music subscribers in 2025, according to Goldman Sachs.
Our Music Publishing business, which includes esteemed songwriters such as Twenty One Pilots, Lizzo and Katy Perry, generated $1,210 million of revenue in fiscal 2024, representing 19% of total revenues. We benefit from the scale of our global platform and our local focus. Today, global music entertainment companies such as ours are more important and relevant than ever.
Our Music Publishing business, which includes esteemed songwriters such as Twenty One Pilots, Lizzo and Katy Perry, generated $1.306 billion of revenue in fiscal 2025, representing 19% of total revenues. We benefit from the scale of our global platform and our local focus. Today, global music entertainment companies such as ours are more important and relevant than ever.
Since 2011 when Access became our controlling shareholder, we have completed a number of strategic acquisitions.
Since Access became our controlling shareholder in 2011, we have completed a number of strategic acquisitions.
Our agreements with digital music services generally last one to three years. In fiscal year 2024, Recorded Music revenue earned under our agreements with our top three digital music accounts, Spotify, YouTube and Apple, accounted for approximately 41% of our Recorded Music revenues.
Our agreements with digital music services generally last one to three years. In fiscal year 2025, Recorded Music revenue earned under our agreements with our top three digital music accounts, Spotify, YouTube and Apple, accounted for approximately 45% of our Recorded Music revenues.
Although we cannot assure you that our trademark applications, even for major trademarks, will register, we endeavor to register our major trademarks in every country where we believe the protection of these trademarks is important for our business.
Trademarks We consider our trademarks to be valuable assets to our business. Although we cannot assure you that our trademark applications, even for major trademarks, will register, we endeavor to register our major trademarks in every country where we believe the protection of these trademarks is important for our business.
According to Goldman Sachs, paid streaming models are at an early stage in China, with an estimated 15% paid streaming penetration rate in 2023. Despite its substantial population, China was the world’s fifth-largest music market in 2023, having only broken into the top 10 in 2017.
According to Goldman Sachs, paid streaming models are at an early stage in China, with an estimated 18% paid streaming penetration rate in 2025. Despite its substantial population, China was the world’s fifth-largest music market in 2024, having only broken into the top 10 in 2017.
Many of our contracts contain a commitment from the record label to fund video production costs, at least a portion of which in certain countries is treated as advances recoupable by us from future royalties. Our recording contracts with established artists generally provide for greater advances and higher royalty rates.
Many of our contracts contain a commitment from us to fund video production costs, at least a portion of which, in certain countries, is treated as advances recoupable by us from future royalties. Our recording contracts with established artists generally provide for greater advances and higher royalty rates than those with new artists.
It also 7 represents a small fraction of the user base for large, globally scaled digital services such as Facebook, which reported 3.3 billion daily active users as of June 2024, and YouTube, which reported over 2.7 billion monthly users as of October 2024.
It also represents a small fraction of the user base for large, globally scaled digital services such as Facebook, which reported 3.5 billion daily active users as of September 2025, and YouTube, which reported over 2.7 billion monthly active users as of October 2025.
In 2024, U.S. mechanical royalties for physical formats (e.g., CDs and vinyl albums) and permanent digital downloads are paid at a rate of 12.4 cents per song per unit or 2.38 cents per minute of playing time (whichever is greater).
In 2025, U.S. mechanical royalties for physical formats (e.g., CDs and vinyl albums) and permanent digital downloads are paid at a rate of 12.7 cents per song per unit or 2.45 cents per minute of playing time (whichever is greater).
Over the last twelve years, Access has consistently backed the Company’s bold expansion strategies through organic A&R as well as acquisitions. These strategies include investing more heavily in recording artists and songwriters, growing the Company’s global reach, augmenting its streaming expertise, overhauling its systems and technological infrastructure, and diversifying into other music-based revenue streams.
Over the last twelve years, Access has consistently backed the Company’s bold expansion strategies through organic A&R as well as acquisitions. These strategies include investing more heavily in recording artists and songwriters, growing the Company’s global reach, augmenting its streaming expertise, and overhauling its systems and technological infrastructure.
This compares to approximately 48%, 39% and 32% for established markets such as the United States, United Kingdom and Germany, respectively. There also remains substantial opportunity in emerging markets, such as Brazil and India, where paid streaming penetration is low compared to developed markets.
This compares to approximately 57%, 50% and 41% for established markets such as the United States, United Kingdom and Germany, respectively. There also remains substantial opportunity in emerging markets, such as Brazil and India, where paid streaming penetration is low compared to developed markets.
Universal Music Group was the market leader with an approximately 32% global market share in 2023 after absorbing the bulk of the recorded music assets of the former EMI in late 2012, followed by Sony Music Entertainment with an approximately 22% share. We held an approximately 16% share of global recorded music revenues in 2023.
Universal Music Group was the market leader with an approximately 32% global market share in 2024 after absorbing the bulk of the recorded music assets of the former EMI in late 2012, followed by Sony Music Entertainment with an approximately 23% share. We held an approximately 15% share of global recorded music revenues in 2024.
For example, according to Goldman Sachs, in 2023, approximately 63% of internet users in Sweden, an early adopter market, were paid music subscribers.
For example, according to Goldman Sachs, in 2025, approximately 67% of internet users in Sweden, an early adopter market, were paid music subscribers.
The purchase of Parlophone Label Group (“PLG”) in 2013 strengthened the Company’s presence in core European territories, with recording artists as diverse as Coldplay, David Bowie, David Guetta and Iron Maiden. That acquisition was followed by other investments that further strengthened the Company’s footprint in established and emerging markets.
The purchase of Parlophone Label Group (“PLG”) in 2013 strengthened the Company’s presence in core European territories, with recording artists as diverse as Coldplay, David Bowie, David Guetta and Iron Maiden. That acquisition was followed by other investments that further strengthened the Company’s footprint in established and emerging markets. Industry Overview The music entertainment industry is large, global and vibrant.
In 2018, the enactment of the MMA in the United States resulted in major reforms to music licensing.
Music Modernization Act (“MMA”). In 2018, the enactment of the MMA in the United States resulted in major reforms to music licensing.
Our typical contract for a new recording artist covers a sufficient number of master recordings to constitute an extended-play record (known as an EP) or an album and provides us with a series of options to acquire subsequent albums from the artist. Royalty rates and advances are often increased for subsequent albums for which we have exercised our options.
Our typical contract for a new recording artist requires the delivery of an extended play record known as an EP or an album and provides us with a series of options to acquire subsequent albums from the recording artist. Royalty rates and advances are often increased on subsequent albums for which we have exercised our options.
According to Goldman Sachs, paid streaming penetration for Brazil and India in 2024 was 14% and 3%, respectively. China, in particular, represents a substantial growth market for the recorded music industry.
According to Goldman Sachs, paid streaming penetration for Brazil and India in 2025 was estimated to be 19% and 3%, respectively. China, in particular, represents a substantial growth market for the recorded music industry.
IFPI measures the recorded music industry on a global scale based on five revenue categories: streaming, downloads and other digital (excluding streaming), physical, synchronization and performance rights. Streaming is the largest of these categories, generating $19.3 billion of revenue in 2023, representing 67% of global recorded music revenue.
IFPI measures the recorded music industry on a global scale based on five revenue categories: streaming, downloads and other digital (excluding streaming), physical, synchronization and performance rights. Streaming is the largest of these categories, generating $20.4 billion of revenue in 2024, representing 69% of global recorded music revenue.
In 2019, the European Union (“EU”) passed legislation which will rein in safe harbors from liability for copyright infringement and rebalance the online marketplace to ensure that rightsholders and recording artists are remunerated fairly when their music is shared online by user-uploaded content services such as YouTube.
In 2019, the European Union (“EU”) passed legislation which will rein in safe harbors from liability for copyright infringement and rebalance the online marketplace to ensure that rightsholders and recording artists are remunerated fairly when their music is shared online by user-uploaded content services such as YouTube. Our Competitive Strengths Differentiated Platform of Scale with Top Industry Position.
By creating value for our recording artists and songwriters, we create value for ourselves. That philosophy is behind our current momentum, and we believe it will continue to propel our business into the future. Welcoming Talent We offer recording artists and songwriters numerous pathways into our ecosystem.
That philosophy is behind our current momentum, and we believe it will continue to propel our business into the future. 16 Welcoming Talent We offer recording artists and songwriters numerous pathways into our ecosystem.
The music publishing industry is also highly competitive. Global music publishing revenue topped the $9 billion milestone for the first time in 2023. The three largest music publishing companies collectively accounted for approximately 60% of the global market in 2023 according to Music & Copyright.
The music publishing industry is also highly competitive. Global music publishing revenue closed in on the $10 billion milestone for the first time in 2024. The three largest music publishing companies collectively accounted for approximately 60% of the global market in 2024 according to Music & Copyright.
We believe we currently compete favorably in these areas. Our Recorded Music business is also dependent on technological development, including access to, selection and viability of new technologies, and is subject to potential pressure from competitors as a result of their technological developments.
Our Recorded Music business is also dependent on technological development, including access to, selection and viability of new technologies, and is subject to potential pressure from competitors as a result of their technological developments.
Technology Enables Innovation and Presents Additional Opportunities Technological innovation has helped facilitate the penetration of music listening across locations, including homes, offices and cars, as well as across devices, including smartphones, tablets, wearables, digital dashboards, gaming consoles, smart speakers, exercise equipment, personal computers and connected TVs.
We believe the value proposition that streaming provides to consumers supports premium product initiatives. Technology Enables Innovation and Presents Additional Opportunities Technological innovation has helped facilitate the penetration of music listening across locations, including homes, offices and cars, as well as across devices, including smartphones, tablets, wearables, digital dashboards, gaming consoles, smart speakers, exercise equipment, personal computers and connected TVs.
For fiscal year 2022 through fiscal year 2024, we have grown as-reported revenues at a CAGR of 4% driven by secular tailwinds, organic reinvestment in A&R and strategic acquisitions. For our fiscal year 2024, our business generated net income and Adjusted EBITDA of $478 million and $1,619 million, respectively, implying an Adjusted EBITDA margin of approximately 25%.
For fiscal year 2023 through fiscal year 2025, we have grown as-reported revenues at a CAGR of 5% driven by secular tailwinds, organic reinvestment in A&R and strategic acquisitions. For our fiscal year 2025, our business generated net income and Adjusted EBITDA of $370 million and $1.752 billion, respectively, implying an Adjusted EBITDA margin of approximately 26%.
The development of our vibrant roster of recording artists has been informed by our significant experience in being able to adapt to changes in consumer trends and sentiment over time.
The development of our vibrant roster of recording artists has been informed by our significant experience in being able to adapt to changes in consumer trends and sentiment over time. Our creative instincts yield custom strategies for each and every one of our recording artists.
We customarily provide upfront payments to recording artists called advances, which are recoupable by us from future royalties otherwise payable to such recording artists. We also typically pay costs associated with the recording and production of music, which in many countries are treated as advances recoupable by us from future royalties.
We also typically pay costs associated with the recording and production of music, which in many countries are treated as advances recoupable by us from future royalties.
Recorded Music The recorded music industry generated $28.6 billion in global revenue in 2023, according to IFPI, which represents a year-over-year increase of 10%, marking the ninth consecutive year of growth. According to IFPI, global recorded music revenue has grown at a CAGR of 11% since 2019.
Recorded Music The recorded music industry generated $29.6 billion in global revenue in 2024, according to IFPI, which represents a year-over-year increase of 4.8%, marking the tenth consecutive year of growth. According to IFPI, global recorded music revenue has grown at a CAGR of 10.6% since 2020.
We also intend to continue to support and invest in emerging technologies, including artificial intelligence, artificial reality, virtual reality, high-resolution audio and other technologies to continue to build new revenue streams and position ourselves for long-term growth. Pursue Acquisitions to Enhance Asset Portfolio and Long-Term Growth.
We also intend to continue to support and invest in emerging technologies, including artificial intelligence, artificial reality, virtual reality, high-resolution audio and other technologies to continue to build new revenue streams and position ourselves for long-term growth. Align Contractual Terms with the Music Industry’s Growth.
We believe that entering into expanded-rights deals and enhancing our artist services capabilities in areas such as merchandising, VIP ticketing, fan clubs, concert promotion and management has permitted us to diversify revenue streams and capitalize on other revenue opportunities. This provides for improved long-term relationships with our recording artists and allows us to more effectively connect recording artists and fans.
We believe that entering into expanded-rights deals and enhancing our artist services capabilities in areas such as merchandising, VIP ticketing, fan clubs, concert promotion and management has permitted us to diversify revenue streams and capitalize on other revenue opportunities.
Less mature markets, such as China and Brazil, have large populations with relatively high smartphone penetration, and we are well placed to benefit from streaming tailwinds over the next several years with our local presence and extensive catalog. Expand Global Presence with Investment in Local Music in Nascent Markets.
Such markets include China and Brazil, that both have large populations with relatively high smartphone penetration, and where we are well placed to benefit from streaming tailwinds over the next several years with our local presence and extensive catalog.
YouTube increased prices of its individual and family plan tiers on both YouTube Premium and YouTube Music in Europe, the Middle East, Singapore, Thailand, and Indonesia in 2024. In 2023, Apple Music increased prices of its individual and family plans in the United States, and Amazon Music Unlimited increased the prices of both its individual and family subscription plans.
In 2025, YouTube increased the prices of its individual and family plan tiers on both YouTube Premium and YouTube Music in Europe. In 2024, Amazon Music Unlimited increased the prices of both its individual and family subscription plans in the United States, Canada and the United Kingdom.
A&R We have a decades-long history of identifying and contracting with recording artists who become commercially successful. Our ability to select recording artists who are likely to be successful is a key element of our Recorded Music business’ strategy and spans all music genres and all major geographies and includes recording artists who achieve national, regional and international success.
Our ability to select recording artists who are likely to be successful is a key element of our Recorded Music business’s strategy and spans all music genres and all major geographies and includes recording artists who achieve national, regional and international success.
According to the IFPI, from 2019 through 2023, global recorded music revenue grew at a CAGR of 11%, with streaming revenue growing at a CAGR of 16% and increasing as a percentage of global recorded music revenue from 57% to 67% over the same period.
According to the IFPI, from 2020 through 2024, global recorded music revenue grew at a CAGR of 10.6%, with streaming revenue growing at a CAGR of 13% and increasing as a percentage of global recorded music revenue from 67% to 69% over the same period.
In contrast to new artists’ contracts, which, with certain territorial or other exceptions, customarily give us ownership in the artist’s work for the full term of the copyright or a long-term exclusive license, established artists’ contracts more commonly provide us with an exclusive license for some fixed period of time.
Typically, such contracts entitle us to fewer albums and, of those, fewer are optional albums. In contrast to new artists’ contracts which, with certain territorial or other exceptions, customarily give us ownership in the artist’s work for the full term of the copyright or a long-term exclusive license, established artists’ contracts more commonly provide us with a long-term exclusive license.
We also sell traditional physical formats through both the online distribution arms of traditional retailers such as target.com and walmart.com and traditional online physical retailers such as amazon.com, bestbuy.com and barnesandnoble.com. Streaming services stream our music on an ad-supported or paid subscription basis. In addition, downloading services sell downloads of our music on a per-album or per-track basis.
We also sell to online retailers such as amazon.com, as well as target.com and walmart.com. Streaming services stream our music on an ad-supported or paid subscription basis. In addition, download services sell downloads of our music on a per-album or per-track basis.
Our Competitive Strengths Well-Positioned to Benefit from Growth in the Global Music Market Driven by Streaming. The music entertainment industry has undergone a transformation in the consumption and monetization of content towards streaming over the last five years.
We believe our financial profile provides a strong foundation for our continued growth. Well-Positioned to Benefit from Growth in the Global Music Market Driven by Streaming. The music entertainment industry has undergone a transformation in the consumption and monetization of content towards streaming over the last several years.
For example, we recently acquired one of South Africa’s leading independent music labels, Coleske, and music from this influential label’s recording artists and songwriters will join our repertoire and receive the support of our wide-ranging global expertise, including distribution and artist services. Differentiated Platform of Scale with Top Industry Position.
For example, in 2021, we acquired one of South Africa’s leading independent music labels, Coleske, and music from this influential label’s recording artists and songwriters will join our repertoire and receive the support of our wide-ranging global expertise, including distribution and artist services. Experienced Leadership Team and Committed Strategic Investor.
Additionally, Instagram reported 2.0 billion monthly users as of October 2024, while TikTok reported 1.5 billion monthly users as of October 2024. Total (audio and video) streaming reached 666 billion streams in the United States in 2024, up 8% from 2023 according to Luminate.
Additionally, Instagram reported 2.0 billion monthly active users as of October 2025, while TikTok reported 1.6 billion monthly 6 active users as of October 2025. Total on-demand streaming (audio) reached 697 billion streams in the United States in 2025, up 4.6% from 2024 according to Luminate.
The graphic below sets out the top ten markets and their respective revenue growth for 2023. Source: IFPI We believe the following secular trends will continue to drive growth in the recorded music industry: Streaming Still in Early Stages of Global Adoption and Penetration According to IFPI, global paid music streaming subscribers totaled 667 million at the end of 2023.
Source: IFPI We believe the following secular trends will continue to drive growth in the recorded music industry: Streaming Still in Early Stages of Global Adoption and Penetration According to IFPI, global paid music streaming subscribers totaled 752 million at the end of 2024.
By comparison, from fiscal year 2019 to fiscal year 2023, our recorded music streaming revenue grew at a CAGR of 11% and increased as a percentage of our total recorded music revenues from 55% to 65%.
By comparison, from fiscal year 2020 to fiscal year 2024, our recorded music streaming revenue grew at a CAGR of 9% and increased as a percentage of our total recorded music revenues from 63% to 66%.
We regularly evaluate our recording artist and songwriter rosters to ensure that we remain focused on developing the most promising and profitable talent and are committed to maintaining financial discipline in the negotiation of our agreements with recording artists and songwriters. 11 Focus on Growth Markets to Position Us to Realize Upside from Incremental Penetration of Streaming.
We regularly evaluate our recording artist and songwriter rosters to ensure that we remain focused on developing the most promising and profitable talent and are committed to maintaining financial discipline in the negotiation of our agreements with recording artists and songwriters. 10 Strategically Invest in Markets with the Most Attractive Opportunities.
In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 180,000 songwriters and composers, with a global collection of more than one and a half million musical compositions.
In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 190,000 songwriters and composers, with a global collection of more than two million musical compositions. Our entrepreneurial spirit and passion for music has driven our recording artist and songwriter focused innovation for decades.
From every meaningful digital music service and social media network to radio, press, film, television and retail, we are plugged into the most influential people and platforms for music entertainment.
Marketing and Promotional Firepower We are experts in the art of amplification, with proven specialties in every aspect of marketing and promotion. From every meaningful digital music service and social media network to radio, press, film, television and retail, we are plugged into the most influential people and platforms for music entertainment.
Our entrepreneurial spirit and passion for music has driven our recording artist and songwriter focused innovation for decades. Our Recorded Music business, home to superstar recording artists such as Ed Sheeran, Bruno Mars, Cardi B and Dua Lipa, generated $5.223 billion of revenue in fiscal 2024, representing 81% of total revenues.
Our Recorded Music business, home to superstar recording artists such as Ed Sheeran, Bruno Mars, Cardi B and Dua Lipa, generated $5.408 billion of revenue in fiscal 2025, representing 81% of total revenues.
Our creative instincts yield custom strategies for each and every one of our recording artists. 10 In addition, Warner Chappell Music boasts a diversified catalog of timeless classics together with an ever-growing group of contemporary songwriters who are actively contributing to today’s top hits.
In addition, Warner Chappell Music boasts a diversified catalog of timeless classics together with an ever-growing group of contemporary songwriters who are actively contributing to today’s top hits.
We believe our financial profile provides a strong foundation for our continued growth. Experienced Leadership Team and Committed Strategic Investor. Our management team has successfully designed and implemented our business strategy, delivering strong financial results, releasing an increasing flow of new music and establishing a dynamic culture of innovation.
Our management team has successfully designed and implemented our business strategy, delivering strong financial results, releasing an increasing flow of new music and establishing a dynamic culture of innovation.
In 2023, we added key new members to our management team, including our CEO, Robert Kyncl, who joined us from YouTube where he served as Chief Business Officer, and our CFO, Bryan Castellani, who joined us from The Walt Disney Company, most recently serving as CFO for Disney Entertainment & ESPN, who together bring fresh perspectives from their tech and entertainment backgrounds to further enhance and evolve our business strategy.
We’ve added key new members to our management team, including our CEO, Robert Kyncl, who joined us from YouTube where he served as Chief Business Officer, and our CFO, Armin Zerza, who joined us from Activision Blizzard where he served as CFO, who together bring fresh perspectives from their tech and entertainment backgrounds to further enhance and evolve our business strategy.
Representative Sample of Recording Artists and Songwriters Our Recorded Music business includes music from: • Global superstars such as Ed Sheeran, Dua Lipa, Linkin Park, Coldplay, Twenty One Pilots, Cardi B, Bruno Mars, Michael Bublé, Lizzo, Kelly Clarkson, David Guetta, Kenny Chesney, Madonna, Neil Young, Red Hot Chili Peppers, Prince, Green Day, Cher, Pink Floyd, David Bowie, Fleetwood Mac, Aretha Franklin and The Smiths. • Next-generation talent including Charli XCX, Benson Boone, Teddy Swims, Zach Bryan, Megan Thee Stallion, Jack Harlow, Lil Uzi Vert, Fred Again.., Artemas, Maria Becerra and CKay. • International stars such as Burna Boy, Aya Nakamura, King, Robin Schulz, TWICE, Ninho, Capo Plaza, Diljit Dosanjh, Udo Lindenberg and Laura Pausini.
Representative Sample of Recording Artists and Songwriters Our Recorded Music business includes music from: • Global superstars such as Ed Sheeran, Dua Lipa, Charli XCX, Linkin Park, Coldplay, Twenty One Pilots, Cardi B, Bruno Mars, Good Charlotte, Lizzo, David Guetta, Green Day, Cher, Charlie Puth, Michael Bublé, Josh Groban, Tiësto, Kenny Chesney, Madonna, Neil Young, Red Hot Chili Peppers, Prince, Pink Floyd, David Bowie, Fleetwood Mac, Aretha Franklin, and The Smiths. 17 • Next-generation talent including Alex Warren, ROS É , Benson Boone, Sombr, The Mar í as, Ravyn Lenae, PinkPantheress, Teddy Swims, Zach Bryan, Dasha, Don Toliver, Jack Harlow, Fred Again.., FKA Twigs, and Rachel Chinouriri. • International stars such as Burna Boy, Aya Nakamura, Yandel, Karan Auijla, King, Robin Schulz, TWICE, Ninho, Capo Plaza, Angelique Kidjo, and Laura Pausini.
Physical represented approximately 17.8% of global recorded music revenue in 2023, with growth in vinyl sales. Performance rights revenue represents the use of recorded music by broadcasters and public venues, and represented approximately 9.4% of global recorded music revenue in 2023. Downloads and other digital revenue represented approximately 3.1% of global recorded music revenue in 2023.
Performance rights revenue represents the use of recorded music by broadcasters and public venues, and represented approximately 9.7% of global recorded music revenue in 2024. Downloads and other digital revenue represented approximately 2.8% of global recorded music revenue in 2024.
Embrace Commercial Innovation with New Digital Distributors and Partners. We believe the growth of digital formats will continue to create new and powerful ways to distribute, engage and monetize.
We will also continue to evaluate opportunities to make investments in companies engaged in businesses that we believe will help to advance our strategies. Embrace Commercial Innovation with New Digital Distributors and Partners. We believe the growth of digital formats will continue to create new and powerful ways to distribute, engage and monetize.
While the rapid growth of streaming has already transformed the music entertainment industry, streaming is still in relatively early stages, as significant opportunity remains in both developed markets and markets largely untapped by the adoption of paid streaming subscriptions.
While the emergence of streaming has already transformed the music entertainment industry, there are significant opportunities for growth in both developed markets and markets largely untapped by the adoption of paid streaming subscriptions.
Within streaming, subscription audio streams generated approximately 73% of revenue, or $14.0 billion, with the remainder of streaming revenue coming from ad-supported audio streams and video streams, which generated 27% of revenue, or $5.3 billion. Overall, streaming grew by 10.3% in 2023 as compared to 2022.
Within streaming, subscription audio streams generated approximately 74% of revenue, or $15.2 billion, with the remainder of streaming revenue coming from ad-supported audio streams and video streams, which generated 26% of revenue, or $5.2 billion. Overall, streaming grew by 7.3% in 2024 as compared to 2023. Physical represented approximately 16.4% of global recorded music revenue in 2024.

… 97 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

82 edited+21 added−16 removed189 unchanged
Biggest changeIf there is a negative result in those litigations and those businesses could legitimately use our copyright-protected material without our consent to train an AI model that could create vast quantities of new musical works to compete with and dilute the impact of our copyright-protected material on digital music services, it could adversely affect our results.
Biggest changeIf there is a negative result in those litigations and those businesses could legitimately use our copyright-protected material without our consent to train an AI model that could create vast quantities of new musical works to compete with and dilute the impact of our copyright-protected material on digital music services, it could adversely affect our results. 28 If we or our service providers do not maintain the security of information relating to our customers, employees and vendors and our music, security information breaches through cyber security attacks or otherwise could damage our reputation with customers, employees, vendors and artists, and we could incur substantial additional costs, become subject to litigation and our results of operations and financial condition could be adversely affected.
Government intervention in the music streaming business or enactment of legislation affecting the terms of our contracts with our artists and songwriters could have an adverse effect on our business, financial condition and results of operations.
Government intervention in the music streaming business or the enactment of legislation affecting the terms of our contracts with our artists and songwriters could have an adverse effect on our business, financial condition and results of operations.
The ability of our subsidiaries to pay dividends or other distributions to the Company in the future will depend, among other things, on their earnings, tax considerations and covenants contained in any financing or other agreements. For instance, our Revolving Credit Facility includes covenants restricting the ability of Acquisition Corp. to pay dividends and make distributions.
The ability of our subsidiaries to pay dividends or make other distributions to the Company in the future will depend, among other things, on their earnings, tax considerations and covenants contained in any financing or other agreements. For instance, our Revolving Credit Facility includes covenants restricting the ability of Acquisition Corp. to pay dividends and make distributions.
For example, our amended and restated certificate of incorporation and amended and restated by-laws collectively: • authorize two classes of common stock with disparate voting power; • permit different treatment of our Class A Common Stock and Class B Common Stock in a change of control transaction if approved by a majority of the voting power of our outstanding Class A Common Stock and a majority of the voting power of our outstanding Class B Common Stock, voting separately; • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; • provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office once Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; • prohibit stockholders from calling special meetings of stockholders if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; • prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; 36 • establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; • require the approval of holders of at least 66 2/3% of the total combined voting power of the outstanding shares of our common stock to amend our amended and restated by-laws and certain provisions of our amended and restated certificate of incorporation if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; and • subject us to Section 203 of the DGCL, which limits the ability of stockholders holding shares representing more than 15% of the voting power of our outstanding voting stock from engaging in certain business combinations with us, once Access no longer owns at least 5% of the total combined voting power of our outstanding common stock.
For example, our amended and restated certificate of incorporation and amended and restated by-laws collectively: • authorize two classes of common stock with disparate voting power; • permit different treatment of our Class A Common Stock and Class B Common Stock in a change of control transaction if approved by a majority of the voting power of our outstanding Class A Common Stock and a majority of the voting power of our outstanding Class B Common Stock, voting separately; • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; • provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office once Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; • prohibit stockholders from calling special meetings of stockholders if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; • prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; • establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; • require the approval of holders of at least 66 2/3% of the total combined voting power of the outstanding shares of our common stock to amend our amended and restated by-laws and certain provisions of our amended and restated certificate of incorporation if Access ceases to beneficially own more than 50% of the total combined voting power of the outstanding shares of our common stock; and • subject us to Section 203 of the DGCL, which limits the ability of stockholders holding shares representing more than 15% of the voting power of our outstanding voting stock from engaging in certain business combinations with us, once Access no longer owns at least 5% of the total combined voting power of our outstanding common stock.
Specifically, the Stockholder Agreement provides that, until the date on which Access ceases to hold at least 10% of our outstanding common stock, Access’s prior written consent will be required before we may take certain corporate and business actions, whether directly or indirectly through a subsidiary, including, among others, the following: • any merger, consolidation or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) with or into any other person whether in a single transaction or a series of transactions, subject to certain specified exceptions; • any acquisition or disposition of securities, assets or liabilities, subject to certain specified exceptions; • any change in our authorized capital stock or the creation of any new class or series of our capital stock; • any issuance or acquisition of capital stock (including stock buy-backs, redemptions or other reductions of capital), or securities convertible into or exchangeable or exercisable for capital stock or equity-linked securities, subject to certain specified exceptions; • any issuance or acquisition of debt securities to or from a third party, subject to certain specified exceptions; and • any amendment (or approval or recommendation of any amendment) to our certificate of incorporation or by-laws.
Specifically, the Stockholder Agreement provides that, until the date on which Access ceases to hold at least 10% of our outstanding common stock, Access’s prior written consent will be required before we may take certain corporate and business actions, whether directly or indirectly through a subsidiary, including, among others, the following: 32 • any merger, consolidation or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) with or into any other person whether in a single transaction or a series of transactions, subject to certain specified exceptions; • any acquisition or disposition of securities, assets or liabilities, subject to certain specified exceptions; • any change in our authorized capital stock or the creation of any new class or series of our capital stock; • any issuance or acquisition of capital stock (including stock buy-backs, redemptions or other reductions of capital), or securities convertible into or exchangeable or exercisable for capital stock or equity-linked securities, subject to certain specified exceptions; • any issuance or acquisition of debt securities to or from a third party, subject to certain specified exceptions; and • any amendment (or approval or recommendation of any amendment) to our certificate of incorporation or by-laws.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, other employees, agents or stockholders, (iii) any action asserting a claim arising out of or under the DGCL, or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our amended and restated certificate of incorporation or our amended and restated by-laws) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to such Court of Chancery of the State of Delaware having personal jurisdiction over the indispensable parties named as defendants.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, other employees, agents or stockholders, (iii) any action asserting a claim arising out of or under the DGCL, or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our amended and restated certificate 38 of incorporation or our amended and restated by-laws) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to such Court of Chancery of the State of Delaware having personal jurisdiction over the indispensable parties named as defendants.
Copyright Act for U.S. rights in musical compositions that are not “works made for hire.” If 26 any of our commercially available sound recordings were determined not to be “works made for hire,” then the recording artists (or their heirs) could have the right to terminate the U.S. federal copyright rights they granted to us, generally during a five-year period starting at the end of 35 years from the date of release of a recording under a post-1977 license or assignment (or, in the case of a pre-1978 grant in a pre-1978 recording, generally during a five-year period starting at the end of 56 years from the date of copyright).
Copyright Act for U.S. rights in musical compositions that are not “works made for hire.” If any of our commercially available sound recordings were determined not to be “works made for hire,” then the recording artists (or their heirs) could have the right to terminate the U.S. federal copyright rights they granted to us, generally during a five-year period starting at the end of 35 years from the date of release of a recording under a post-1977 license or assignment (or, in the case of a pre-1978 grant in a pre-1978 recording, generally during a five-year period starting at the end of 56 years from the date of copyright).
In addition, under the provisions of a stockholder agreement entered into with Access (the “Stockholder Agreement”), the relevant terms of which govern the powers afforded the Company under our organizational documents, Access has consent rights with respect to 31 certain corporate and business activities that we may undertake, including during periods where Access holds less than a majority of the total combined voting power of our outstanding common stock.
In addition, under the provisions of a stockholder agreement entered into with Access (the “Stockholder Agreement”), the relevant terms of which govern the powers afforded the Company under our organizational documents, Access has consent rights with respect to certain corporate and business activities that we may undertake, including during periods where Access holds less than a majority of the total combined voting power of our outstanding common stock.
The U.S. government, including Congress, the Federal Trade Commission and the Department of Commerce, has announced that it is reviewing the need for even greater regulation for the collection of information concerning consumer behavior on the Internet and mobile platforms, including regulation aimed at restricting certain targeted advertising practices, the use of location data and disclosures of privacy practices in the online and mobile environments, including with respect to online and mobile applications.
The U.S. government, including Congress, the Federal Trade Commission and the Department of Commerce, has announced that it is reviewing the need for even greater regulation of the collection of information concerning consumer behavior on the Internet and mobile platforms, including regulations aimed at restricting certain targeted advertising practices, the use of location data and disclosures of privacy practices in the online and mobile environments, including with respect to online and mobile applications.
Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions and the impact of the economic environment on our operating results. Failure to achieve sufficient levels of cash flow at our reporting units could also result in impairment charges on goodwill and indefinite-lived intangible assets.
Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions and the impact of the economic environment on our operating results. Failure to achieve sufficient levels of cash flow at our reporting units could also result in impairment charges on goodwill and indefinite-lived intangible 24 assets.
This reliance subjects us to risks arising from the loss of control over processes, changes in pricing that may affect our operating results, and potentially, termination of these services by our 25 suppliers. A failure of our service providers to perform services in a satisfactory manner may have a significant adverse effect on our business.
This reliance subjects us to risks arising from the loss of control over processes, changes in pricing that may affect our operating results, and potentially, termination of these services by our suppliers. A failure of our service providers to perform services in a satisfactory manner may have a significant adverse effect on our business.
For example, our business may be further adversely affected by technological developments, including AI, that facilitate the piracy of music, by an inability to enforce our intellectual property rights in digital environments and by a failure to further develop successful business models applicable to a digital environment.
For example, our business may be further adversely affected by technological developments, including generative AI, that facilitate the piracy of music, by an inability to enforce our intellectual property rights in digital environments and by a failure to further develop successful business models applicable to a digital environment.
For example, Access will be able to control elections of directors, amendments of our certificate of incorporation or by-laws, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans and approval of any merger or sale of assets for the foreseeable future.
For example, Access will be able to control elections of directors, amendments of our certificate of incorporation or by-laws, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans and approval of 34 any merger or sale of assets for the foreseeable future.
In performing our annual tests and 24 determining whether indications of impairment exist, we consider numerous factors including actual and projected operating results of each reporting unit, external market factors such as market prices for similar assets and trends in the music entertainment industry.
In performing our annual tests and determining whether indications of impairment exist, we consider numerous factors including actual and projected operating results of each reporting unit, external market factors such as market prices for similar assets and trends in the music entertainment industry.
The inability to receive dividends from our subsidiaries could have a material adverse effect on our business, financial condition, liquidity or results of operations. The subsidiaries of the Company have no obligation to pay amounts due on any liabilities of the Company or to make funds available to the Company for such payments.
The inability to receive 30 dividends from our subsidiaries could have a material adverse effect on our business, financial condition, liquidity or results of operations. The subsidiaries of the Company have no obligation to pay amounts due on any liabilities of the Company or to make funds available to the Company for such payments.
These relationships may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for Access and us. As a result of these relationships, the interests of Access may not coincide with our interests or the interests of the holders of our Class A Common Stock.
These relationships may create, 33 or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for Access and us. As a result of these relationships, the interests of Access may not coincide with our interests or the interests of the holders of our Class A Common Stock.
We may, from time to time, refinance our existing indebtedness, which could result in the agreements governing any new indebtedness having fewer or less restrictive covenants. Despite our indebtedness levels, we may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness.
We may, from time to time, refinance our existing indebtedness, which could result in the agreements governing any new indebtedness having fewer or less restrictive covenants. 31 Despite our indebtedness levels, we may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness.
Affiliates of our controlling stockholder engage in transactions with us. Further, Access may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us, and they may either directly, or through affiliates, also maintain business relationships with companies that may 32 directly compete with us.
Affiliates of our controlling stockholder engage in transactions with us. Further, Access may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us, and they may either directly, or through affiliates, also maintain business relationships with companies that may directly compete with us.
We intend to rely on these exemptions. As a result, we are not required to have a majority of independent directors, our compensation and our nominating and corporate governance committees will not consist entirely of independent directors and such committees may not be subject to annual performance evaluations.
We rely on these exemptions. As a result, we are not required to have a majority of independent directors, our compensation and our nominating and corporate governance committees will not consist entirely of independent directors and such committees may not be subject to annual performance evaluations.
The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not 37 available under the DGCL.
The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL.
Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our Class A Common Stock to decline. The market price of our Class A Common Stock may be volatile and could decline. The market price of our Class A Common Stock may fluctuate significantly.
Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our Class A Common Stock to decline. 35 The market price of our Class A Common Stock may be volatile and could decline. The market price of our Class A Common Stock may fluctuate significantly.
There can be no assurance that this growth pattern will persist or that digital revenue will continue to grow at a rate sufficient to offset and exceed declines in downloads and physical sales.
There can be no assurance that this growth pattern will continue or that digital revenue will continue to grow at a rate sufficient to offset and exceed declines in downloads and physical sales.
If a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, results of operations and financial condition. 38 ITEM 1B.
If a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, results of operations and financial condition. 39 ITEM 1B.
We are dependent on identifying, signing and retaining recording artists with long-term potential, whose debut music is well received on release, whose subsequent music is anticipated by consumers and whose music will continue to generate sales as part of our catalog for years to come. The competition among record companies for such talent is intense.
We are dependent on identifying, signing and retaining recording artists with long-term potential, whose debut music is well received on release, whose subsequent music is anticipated by consumers and whose music will continue to generate revenue as part of our catalog for years to come. The competition among record companies for such talent is intense.
If the mechanical and performance royalty rates are set too high it may also adversely affect us by limiting our ability to increase the profitability of our Recorded Music business. In addition, rates our Recorded Music business receives in the United States for webcasting and satellite radio are set every five years by an administrative process under the U.S.
If the mechanical and performance royalty rates are set too high, they may also adversely affect us by limiting our ability to increase the profitability of our Recorded Music business. In addition, rates our Recorded Music business receives in the United States for webcasting and satellite radio are set every five years by an administrative process under the U.S.
In most territories outside the United States, mechanical royalties are based on a percentage of wholesale prices for physical product and based on a percentage of consumer prices for digital formats. The mechanical and performance royalty rates set pursuant to such processes may adversely affect us by limiting our ability to increase the profitability of our Music Publishing business.
In most territories outside the United States, mechanical royalties are based on a percentage of wholesale prices for physical products and based on a percentage of consumer prices for digital formats. The mechanical and performance royalty rates set pursuant to such processes may adversely affect us by limiting our ability to increase the profitability of our Music Publishing business.
FASB ASC Topic 360-10-35 (“ASC 360-10-35”) requires companies to review these assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. No such events or circumstances were identified during the fiscal year ended September 30, 2024.
FASB ASC Topic 360-10-35 (“ASC 360-10-35”) requires companies to review these assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. No such events or circumstances were identified during the fiscal year ended September 30, 2025.
If one or more of the analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline.
If one or more of the analysts downgrades our stock or publishes misleading or unfavorable 36 research about our business, our stock price would likely decline.
Streaming revenue is important because it has offset declines in downloads and physical sales and now represents the substantial majority of our business, which continues to grow. According to IFPI, streaming revenue, which includes revenue from ad-supported and subscription services, accounted for approximately 96% of digital revenue in 2023.
Streaming revenue is important because it has offset declines in downloads and physical sales and now represents the substantial majority of our business, which continues to grow. According to IFPI, streaming revenue, which includes revenue from ad-supported and subscription services, accounted for approximately 96% of digital revenue in 2024.
We performed an annual assessment, at July 1, 2024, of the recoverability of our goodwill and indefinite-lived intangibles as of September 30, 2024, noting no instances of impairment. However, future events may occur that could adversely affect the estimated fair value of our reporting units.
We performed an annual assessment, at July 1, 2025, of the recoverability of our goodwill and indefinite-lived intangibles as of September 30, 2025, noting no instances of impairment. However, future events may occur that could adversely affect the estimated fair value of our reporting units.
Governments could enact new legislation or could make regulatory determinations that affect the terms of our contracts with recording artists and songwriters. Some performer groups, particularly in Europe, are urging governments to intervene in the music streaming business in ways that could affect the terms agreed in our contracts with artists and songwriters.
Governments could enact new legislation or could make regulatory determinations that affect the terms of our contracts with recording artists and songwriters. Some performer groups, particularly in Europe and Latin America, are urging governments to intervene in the music streaming business in ways that could affect the terms agreed in our contracts with artists and songwriters.
Under our amended and restated certificate of incorporation, Access and its affiliates, and in some circumstances, any of our directors and officers who is also a director, officer, employee, stockholder, member or partner of Access and its affiliates, have no obligation to offer us corporate opportunities.
Under our amended and restated certificate of incorporation, Access and its affiliates, and in some circumstances, any of our directors and officers who are also a director, officer, employee, stockholder, member or partner of Access and its affiliates, have no obligation to offer us corporate opportunities.
Failure to adapt the Company's operations and supply-chain to respond to climate change related extreme weather events, rising temperatures, and natural disasters could potentially result in lost revenue and/or higher costs due to operational disruptions, property damage, increased cooling costs, as well as financial losses, and/or penalties for insurance deductibles, increased insurance premiums or loss of access to insurance coverage for company facilities and regulatory compliance.
Failure to adapt our operations and supply-chain to respond to climate change-related extreme weather events, rising temperatures, and natural disasters could potentially result in lost revenue and/or higher costs due to operational disruptions, property damage, increased cooling costs, as well as financial losses, and/or penalties for insurance deductibles, increased insurance premiums or loss of access to insurance coverage for company facilities and regulatory compliance.
Mechanical royalties and performance royalties are two of the main sources of income to our Music Publishing business and mechanical royalties are a significant expense to our Recorded Music business. In the United States, mechanical royalty rates are set every five years pursuant to an administrative process under the U.S.
Mechanical royalties and performance royalties are two of the main sources of income to our Music Publishing business and mechanical royalties are an expense to our Recorded Music business. In the United States, mechanical royalty rates are set every five years pursuant to an administrative process under the U.S.
Amounts for both periods were recorded in the Recorded Music segment. In 2024, the Company announced a strategic restructuring plan (the “Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade.
Amounts for both periods were recorded in the Recorded Music segment. 2024 Strategic Restructuring Plan In 2024, the Company announced a strategic restructuring plan (the “2024 Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade.
The effects of CCPA and these other recently adopted laws includes an increased ability of individuals to control the use of their personal data; heightened transparency obligations, increased obligations of companies 28 to maintain the security of data; and increased exposure to fines or damages for companies that do not accord individuals their specified privacy rights, that experience data breaches or that do not maintain cybersecurity at certain levels of quality.
The effects of CCPA and these other recently adopted laws include an increased ability of individuals to control the use of their personal data; heightened transparency obligations; increased obligations of companies to maintain the security of data; and increased exposure to fines or damages for companies that do not accord individuals their specified privacy rights, that experience data breaches or that do not maintain cybersecurity at certain levels of quality.
Because of the 20-to-1 voting ratio between the Class B Common Stock and Class A Common Stock, the holders of Class B Common Stock collectively continue to control a majority of the total combined voting power of our outstanding common stock and therefore be able to control all matters submitted to our stockholders for approval, so long as the outstanding shares 33 of Class B Common Stock represent at least approximately 10% of the total number of outstanding shares of common stock.
Because of the 20-to-1 voting ratio between the Class B Common Stock and Class A Common Stock, the holders of Class B Common Stock collectively continue to control a majority of the total combined voting power of our outstanding common stock and therefore are able to control all matters submitted to our stockholders for approval, so long as the outstanding shares of Class B Common Stock represent at least approximately 10% of the total number of outstanding shares of common stock.
While our operations in Russia and Israel do not constitute a material portion of our business, a prolonged continuation, significant escalation or expansion of these conflicts’ current scope, increased or sustained economic disruption, sanctions or countersanctions, further devaluation of local currencies or increased cyber-related disruptions affecting these countries or adjacent territories could make it difficult to deliver our content, increase costs, and have an adverse effect on our results of operations in these areas.
While our operations in Russia and the Middle East do not constitute a material portion of our business, a prolonged continuation, significant escalation or expansion of these conflicts’ current scope, increased or sustained economic disruption, sanctions or countersanctions, further devaluation of local currencies or increased cyber-related disruptions affecting these countries or adjacent territories could make it difficult to deliver our content, increase costs, and have an adverse effect on our results of operations in these areas.
In addition, there is increasing scrutiny and evolving expectations from investors, our recording artists, regulators and other stakeholders of our climate-related practices and disclosures. Regulators, both in the United States and in foreign jurisdictions where we operate, have imposed and likely will continue to impose climate-related rules and guidance.
In addition, there is increasing scrutiny and evolving expectations from investors, our recording artists, regulators and other stakeholders of our climate-related practices and disclosures. Regulators, both in the United States and in foreign jurisdictions where we operate, have imposed and may continue to impose climate-related rules and guidance.
Governments, including states in the United States, have enacted or considered enacting legislation limiting the duration that an individual can be bound under a “personal services” contract, which could impair our ability to retain the services of key artists and songwriters.
Additionally, governments, including certain state governments in the United States, have enacted or considered enacting legislation limiting the duration that an individual can be bound under a “personal services” contract, which could impair our ability to retain the services of key artists and songwriters.
We derive an increasing portion of our revenue from the licensing of music through digital distribution channels. We are currently dependent on a small number of leading digital music services. In fiscal year 2024, revenue earned under our license agreements with our top three digital music accounts, Spotify, Google/YouTube and Apple, accounted for approximately 41% of our total revenue.
We derive an increasing portion of our revenue from the licensing of music through digital distribution channels. We are currently dependent on a small number of leading digital music services. In fiscal year 2025, revenue earned under our license agreements with our top three digital music accounts, Spotify, Google/YouTube and Apple, accounted for approximately 43% of our total revenue.
The Company started a multi-year implementation in August 2019 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.
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.
These translations could result in significant changes to our results of operations from period to period. Prior to intersegment eliminations, 55% of our revenues related to operations in foreign territories for the fiscal year ended September 30, 2024. From time to time, we enter into foreign exchange contracts to hedge the risk of unfavorable foreign currency exchange rate movements.
These translations could result in significant changes to our results of operations from period to period. Prior to intersegment eliminations, 57% of our revenues related to operations in foreign territories for the fiscal year ended September 30, 2025. From time to time, we enter into foreign exchange contracts to hedge the risk of unfavorable foreign currency exchange rate movements.
There can be no assurance that we would prevail in any such litigation. If we were to lose a litigation relating to intellectual property, we could be forced to pay monetary damages and to cease using certain intellectual property or technologies. Any of the foregoing may adversely affect our business. Digital piracy continues to adversely impact our business.
There can be no assurance that we would prevail in any such litigation. If we were to lose a litigation relating to intellectual property, we could be forced to pay monetary damages and to cease using certain intellectual property or technologies. Any of the foregoing may adversely affect our business.
As of September 30, 2024, our total consolidated indebtedness, net of premiums, discounts and deferred financing costs, was $4.014 billion. Further, we would have been able to borrow up to $350 million under our Revolving Credit Facility (as defined later in this Annual Report) as of September 30, 2024.
As of September 30, 2025, our total consolidated indebtedness, net of premiums, discounts and deferred financing costs, was $4.365 billion. Further, we would have been able to borrow up to $350 million under our Revolving Credit Facility (as defined later in this Annual Report) as of September 30, 2025.
State governments are engaged in similar legislative and regulatory activities (including the California Consumer Privacy Act (“CCPA”) effective on January 1, 2020, the California Privacy Rights and Enforcement Act, effective January 1, 2023 (“CPRA”) and other analogous statutes more recently in other states).
State governments are engaged in similar legislative and regulatory activities (including the California Consumer Privacy Act (“CCPA”), effective January 1, 2020, the California Privacy Rights and Enforcement Act, effective January 1, 2023 (“CPRA”) and other analogous statutes in other states).
If the value of the acquired goodwill or acquired indefinite-lived intangible assets is impaired, our operating results and shareholders’ equity could be adversely affected. We also had $2.359 billion of definite-lived intangible assets as of September 30, 2024.
If the value of the acquired goodwill or acquired indefinite-lived intangible assets is impaired, our operating results and shareholders’ equity could be adversely affected. We also had $2.725 billion of definite-lived intangible assets as of September 30, 2025.
As a result, we may not be paid appropriately for our music. Failure to be accurately paid our royalties may adversely affect our business, results of operations and financial condition. Our business operations in the United States and in some foreign countries subject us to trends, developments or other events which may affect us adversely.
As a result, we may not be paid appropriately for our music. If we are not accurately paid, it may adversely affect our business, results of operations and financial condition. Our business operations in the United States and in some foreign countries subject us to trends, developments or other events which may affect us adversely.
As of September 30, 2024, our total consolidated indebtedness, net of premiums, discounts and deferred financing costs, was $4.014 billion, all of which ranks senior to our Class A Common Stock.
As of September 30, 2025, our total consolidated indebtedness, net of premiums, discounts and deferred financing costs, was $4.365 billion, all of which ranks senior to our Class A Common Stock.
Risks Related to Intellectual Property and Data Security Failure to obtain, maintain, protect and enforce our intellectual property rights could substantially harm our business, operating results and financial condition. The success of our business depends on our ability to obtain, maintain, protect and enforce our trademarks, copyrights and other intellectual property rights.
Risks Related to Intellectual Property and Data Security Failure to obtain, maintain, protect and enforce our intellectual property rights could substantially harm our business, operating results and financial condition. The success of our business depends on our ability to obtain, maintain, protect and enforce our trademarks, copyrights and other intellectual property rights, including name, image, likeness and voice rights.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of September 30, 2024, we had 142,559,174 outstanding shares of Class A Common Stock and 375,380,313 outstanding shares of Class B Common Stock.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of September 30, 2025, we had 146,906,334 outstanding shares of Class A Common Stock and 375,380,313 outstanding shares of Class B Common Stock.
Our Recorded Music business competes not only with other recorded music companies, but also with recording artists who may choose to distribute their own works (which has become more practicable as music is distributed online rather than physically) and companies in other industries (such as Spotify) that may choose to sign direct deals with recording artists or recorded music companies.
Our Recorded Music business competes not only with other recorded music companies, but also with recording artists who may choose to distribute their own works (which has become an easy option as music is distributed online rather than physically) and companies in other industries (such as digital music services) that may choose to sign direct deals with recording artists or recorded music companies.
We expect to increase revenues and cash flow through a business strategy which requires us, among other things, to continue to maximize the value of our music, to significantly reduce costs to maximize flexibility and adjust to new realities of the market, to continue to act to contain digital piracy and to diversify our revenue streams into growing segments of the music entertainment business by capitalizing on digital distribution and emerging technologies, entering into expanded-rights deals with recording artists and operating our artist services businesses.
We expect to increase revenues and cash flow through a business strategy which requires us, among other things, to continue to maximize the value of our music, to significantly reduce costs to maximize flexibility and adjust to new realities of the market, to continue to act to contain digital piracy and streaming fraud and to diversify our revenue streams into growing segments of the music entertainment business by capitalizing on digital distribution and emerging technologies, entering into expanded-rights deals with recording artists and operating our artist services businesses. 23 Each of these initiatives requires sustained management focus, organization and coordination over significant periods of time.
Each of these initiatives requires sustained management focus, organization and coordination over significant periods of time. Each of these initiatives also requires success in building relationships with third parties and in anticipating and keeping up with technological developments and consumer preferences and may involve the implementation of new business models or distribution platforms.
Each of these initiatives also requires success in building relationships with third parties and in anticipating and keeping up with technological developments and consumer preferences and may involve the implementation of new business models or distribution platforms.
We have outsourced certain finance and accounting functions and may outsource other back-office functions, which will make us more dependent upon third parties. In an effort to be more efficient and generate cost savings, we have outsourced certain finance and accounting functions. As a result, we rely on third parties to ensure that our needs are sufficiently met.
In an effort to be more efficient and generate cost savings, we have outsourced certain finance and accounting functions. As a result, we rely on third parties to ensure that our needs are sufficiently met.
In addition, 31,169,099 shares of our Class A Common Stock were reserved for future issuances under the Omnibus Incentive Plan adopted in connection with the IPO over the 10-year period from the date of adoption.
In addition, 31,169,099 shares of our Class A Common Stock were reserved for future issuances under the Omnibus Incentive Plan adopted in connection with the IPO over the 10-year period from the date of adoption. As of September 30, 2025, there were 29,357,018 shares of Class A Common Stock available to be issued.
As of September 30, 2024, Acquisition Corp.’s Total Indebtedness to EBITDA Ratio is 2.05x and the term loans achieved a corporate credit rating of BBB- from both S&P and Fitch. Our ability to borrow additional amounts under the Revolving Credit Facility depends upon satisfaction of these covenants. Events beyond our control can affect our ability to meet these covenants.
As of September 30, 2025, Acquisition Corp.’s Total Indebtedness to EBITDA Ratio is 2.02x and the term loans achieved corporate credit ratings of BBB- from both S&P and Fitch and Ba1 from Moody’s. Our ability to borrow additional amounts under the Revolving Credit Facility depends upon satisfaction of these covenants.
In addition, under the credit agreement governing the Revolving Credit Facility, a financial maintenance covenant is applicable if at the end of a fiscal quarter the outstanding amount of loans and letters of credit is in excess of $140 million.
Events beyond our control can affect our ability to meet these covenants. In addition, under the credit agreement governing the Revolving Credit Facility, a financial maintenance covenant is applicable if at the end of a fiscal quarter the outstanding amount of loans and letters of credit is in excess of $140 million.
The Company is a holding company for all of our operations and is a legal entity separate from its subsidiaries. Dividends and other distributions from the Company’s subsidiaries are the principal sources of funds available to the Company to pay corporate operating expenses, to pay stockholder dividends, to repurchase stock and to meet its other obligations.
Dividends and other distributions from the Company’s subsidiaries are the principal sources of funds available to the Company to pay corporate operating expenses, to pay stockholder dividends, to repurchase stock and to meet its other obligations.
Our inability to structure our operations based on evolving market conditions could impact our business. Restructuring activities can create unanticipated consequences and negative impacts on the business, and we cannot be sure that any ongoing or future restructuring efforts will be successful or generate expected cost savings.
Restructuring activities can create unanticipated consequences and negative impacts on the business, and we cannot be sure that any ongoing or future restructuring efforts will be successful or generate expected cost savings.
As of September 30, 2024, we had $2.021 billion of goodwill and $152 million of indefinite-lived intangible assets.
As of September 30, 2025, we had $2.061 billion of goodwill and $154 million of indefinite-lived intangible assets.
Our failure to comply with the restrictive covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all of our indebtedness.
Our failure to comply with the restrictive covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all of our indebtedness. Any such event of default or acceleration could have an adverse effect on the trading price of our common stock.
We are a “controlled company” within the meaning of NASDAQ rules and, as a result, we qualify for, and intend to rely on, exemptions from certain corporate governance requirements. Access holds approximately 98% of the total combined voting power of our outstanding common stock. Accordingly, we qualify as a “controlled company” within the meaning of NASDAQ corporate governance standards.
Access holds approximately 98% of the total combined voting power of our outstanding common stock. Accordingly, we qualify as a “controlled company” within the meaning of NASDAQ corporate governance standards.
Additionally, changes in law may be implemented, or changes in interpretation of such laws may occur, that may affect our ability to obtain, maintain, protect or enforce our intellectual property rights. Failure to obtain, maintain, protect or enforce our intellectual property rights could harm our brand or brand recognition and adversely affect our business, results of operations and financial condition.
Additionally, changes in law may be implemented, or changes 27 in interpretation of such laws may occur, that may affect our ability to obtain, maintain, protect or enforce our intellectual property rights.
We expect to incur material costs in connection with this project, and there can be no assurance that we will be successful in upgrading our systems and processes effectively or on the timetable and at the costs contemplated, or that we will achieve the expected long-term cost savings.
We expect to incur material costs in connection with this project, and there can be no assurance that we will be successful in upgrading our systems and processes effectively or on the timetable and at the costs contemplated, or that we will achieve the expected long-term cost savings. 2023 Restructuring Plan In March 2023, we announced a restructuring plan, (the “2023 Restructuring Plan”) intended to drive the evolution of the Company and position the Company for long-term growth, primarily through headcount reductions.
There can be no assurance that in the future country-specific trends, developments or other events, either in the United States or elsewhere, including following the 2024 United States federal elections, will not have a significant adverse effect on our business, results of operations or financial condition.
There can be no assurance that in the future country-specific trends, developments or other events, either in the United States or elsewhere, will not have a significant adverse effect on our business, results of operations or financial condition. Unfavorable conditions can depress revenue in any given market and prompt promotional or other actions that adversely affect our margins.
Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which could materially and adversely affect our business, results of operations and financial condition. 35 Due to the nature of our business, our results of operations, cash flows and the trading price of our common stock may fluctuate significantly from period to period.
Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which could materially and adversely affect our business, results of operations and financial condition.
During the current fiscal year, we have hedged a portion of our material foreign currency exposures related to royalty payments remitted between our foreign affiliates and our U.S. affiliates.
During the current fiscal year, we have hedged a portion of our material foreign currency exposures related to royalty payments remitted between our foreign affiliates and our U.S. affiliates. However, these hedging strategies should not be expected to fully eliminate the foreign exchange rate risk to which we are exposed.
If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all. 30 All of these restrictions could affect our ability to operate our business or may limit our ability to take advantage of potential business opportunities as they arise, and may have an adverse effect on the trading price of our common stock.
All of these restrictions could affect our ability to operate our business or may limit our ability to take advantage of potential business opportunities as they arise, and may have an adverse effect on the trading price of our common stock.
Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Class A Common Stock if the provisions are viewed as discouraging takeover attempts in the future.
Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Class A Common Stock if the provisions are viewed as discouraging takeover attempts in the future. 37 Our amended and restated certificate of incorporation and amended and restated by-laws may also make it difficult for stockholders to replace or remove our management.
Impairment charges recognized primarily relate to the winding down of the Company’s O&O Media Properties. We cannot be certain that we will not be required to implement further restructuring activities, make additions or other changes to our management or workforce based on other cost reduction measures or changes in the markets and industry in which we compete.
We cannot be certain that we will not be required to implement further restructuring activities, make changes to our management or workforce based on other cost reduction measures or changes in the markets and industry in which we compete. Our inability to structure our operations based on evolving market conditions could impact our business.
These provisions may facilitate management and board entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.
These provisions may facilitate management and board entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders. We are a “controlled company” within the meaning of NASDAQ rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements.
Globally, many government and consumer agencies have also called for new regulation and changes in industry practices with respect to information collected from consumers, electronic marketing and the use of third-party cookies, web beacons and similar technology for online behavioral advertising.
Globally, many government and consumer agencies have also called for new regulation and changes in industry practices with respect to information collected from consumers, electronic marketing and the use of third-party cookies, web beacons and similar technology for online behavioral advertising. 29 Our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices.
There was a $1 million benefit associated with the 2023 Restructuring Plan recorded for the fiscal year ended September 30, 2024 primarily associated with a change in estimate for costs previously recorded. During the fiscal year ended September 30, 2023, the Company recognized restructuring charges of approximately $40 million for severance costs.
The 2023 Restructuring Plan is substantially complete as of September 30, 2025. The Company recognized a $1 million benefit associated with the 2023 Restructuring Plan in the fiscal years ended September 30, 2025 and September 30, 2024, primarily associated with changes in estimates for costs previously recorded.
Our prospects and financial results may be adversely affected if we fail to identify, sign and retain recording artists and songwriters and by the existence or absence of superstar releases.
The Recorded Music business also faces competition from other forms of entertainment and leisure activities, such as television, motion pictures and video games in physical and digital formats. Our prospects and financial results may be adversely affected if we fail to identify, sign and retain recording artists and songwriters and by the existence or absence of superstar releases.
The impact of digital piracy on legitimate music revenues and subscriptions is hard to quantify, but we believe that illegal file sharing and other forms of unauthorized activity, including stream manipulation, have a substantial negative impact on music revenues. 27 If we fail to obtain appropriate relief through the judicial process or the complete enforcement of judicial decisions issued in our favor (or if judicial decisions are not in our favor), if we are unsuccessful in our efforts to lobby governments to enact and enforce stronger legal penalties for copyright infringement or if we fail to develop effective means of protecting and enforcing our intellectual property (whether copyrights or other intellectual property rights such as patents, trademarks and trade secrets) or our music entertainment-related products or services, our results of operations, financial position and prospects may suffer.
If we fail to obtain appropriate relief through the judicial process or the complete enforcement of judicial decisions issued in our favor (or if judicial decisions are not in our favor), if we are unsuccessful in our efforts to lobby governments to enact and enforce strong legal penalties for copyright infringement and streaming manipulation or if we fail to develop effective means of protecting and enforcing our intellectual property rights in these areas, our results of operations, financial position and prospects may suffer.
A substantial portion of our revenue comes from the distribution of music which is potentially subject to unauthorized consumer copying and widespread digital dissemination without an economic return to us, including as a result of “stream-ripping.” In its Engaging with Music 2023 report, IFPI surveyed 43,000 people to examine the ways in which music consumers engaged with recorded music across 26 countries.
Digital piracy and streaming manipulation has and may continue to adversely impact our business. A substantial portion of our revenue comes from the distribution of music which is potentially subject to unauthorized consumer copying and widespread digital dissemination without an economic return to us, including as a result of “stream-ripping.” There is also a threat from organized industrial piracy.
However, these hedging strategies should not be expected to fully eliminate the foreign exchange rate risk to which we are exposed. 23 Our business may be adversely affected by competitive market conditions, and we may not be able to execute our business strategy.
Our business may be adversely affected by competitive market conditions, and we may not be able to execute our business strategy.
Additionally, for the fiscal year ended September 30, 2024, the Company recognized $57 million of non-cash restructuring and impairments which was comprised of $50 million of impairment losses on unamortized intangible assets and $7 million of non-cash restructuring related to future equity awards to be granted, of which, $54 million was recognized in our Recorded Music segment and $3 million was recognized in Corporate.
Additionally, for the fiscal year ended September 30, 2025, the Company recognized $28 million of impairment losses, of which $6 million of expense was recognized in our Recorded Music segment and $22 million was recognized in Corporate.
The majority of severance payments and other termination costs are expected to be paid by the end of fiscal year 2026. For the fiscal year ended September 30, 2024, the Company recognized a total of $178 million of restructuring and impairments in connection with the Strategic Restructuring Plan.
Approximately $170 million of the charges will be for severance payments and other related termination costs and approximately $30 million of certain other charges. The Company anticipates that the Plan will result in cash expenditures of approximately $200 million of which $170 million is expected to be paid by the end of fiscal year 2026.

… 39 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed24 unchanged
Biggest changeCybersecurity threats are also considered during meetings of our board of directors through discussions of enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management and other relevant matters. Our cybersecurity risk management and strategy processes are led by our CISO and the Cyber Risk Committee.
Biggest changeIn addition, these sessions include a review of the broader threat landscape and how our business may be affected. Cybersecurity threats are also considered during meetings of our board of directors through discussions of enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management and other relevant matters.
Moreover, even if we or our service providers maintain such security, such breaches remain a possibility due to the fact that no data security system is immune from attacks or other incidents.” 39 Cybersecurity Governance Cybersecurity is an important part of our risk management processes and an area of increasing focus for our board of directors and management.
Moreover, even if we or our service providers maintain such security, such breaches remain a possibility due to the fact that no data security system is immune from attacks or other incidents.” 40 Cybersecurity Governance Cybersecurity is an important part of our risk management processes and an area of increasing focus for our board of directors and management.
Our CISO has over 25 years of prior work experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs and controls, as well as relevant certifications, including Certified Industry Systems Security Professional.
Our cybersecurity risk management and strategy processes are led by our CISO and the Cyber Risk Committee. Our CISO has over 25 years of prior work experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs and controls, as well as relevant certifications, including Certified Industry Systems Security Professional.
We conduct monthly Cyber Risk Committee meetings with the participation of these teams to review risks in each of those functions and any cross-functional risks.
We conduct monthly Cyber Risk Committee meetings with the participation of these teams to review risks in each of those functions and any cross-functional risks. The Cyber Risk Committee also reviews the industry landscape at these meetings to help ensure we are aware of global and industry cyber activities.
As part of the above processes, we at least annually engage with assessors, consultants, and other third-parties, including by having an independent Qualified Security Assessor review our cybersecurity program quarterly to help identify areas for continued focus and enhancements regarding Payment Card Industry compliance.
As part of the above processes, we at least annually engage with assessors, consultants, and other third parties to measure and assess our maturity level against standard frameworks. Also, an independent Qualified Security Assessor review regarding Payment Card Industry compliance is performed on a quarterly basis to help ensure we maintain compliance with the PCI standards.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed4 unchanged
Biggest changeRegardless of the outcome, litigation could have an adverse impact on the Company, including the Company’s brand value, because of defense costs, diversion of management resources and other factors and it could have a material effect on the Company’s results of operations for a given reporting period. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 40 PART II
Biggest changeRegardless of the outcome, litigation could have an adverse impact on the Company, including the Company’s brand value, because of defense costs, diversion of management resources and other factors and it could have a material effect on the Company’s results of operations for a given reporting period. 41 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 42 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+3 added−2 removed10 unchanged
Biggest changeStarting with the 2023 fiscal year, the quarterly intervals below are based on the Company’s modified fiscal year in which each reporting period ends on the last day of the calendar quarter. 41 The comparisons in the graph below are based on historical data and are not indicative of, nor intended to forecast, future performance of our Class A Common Stock. 6/3/20 6/26/20 9/25/20 12/24/20 3/26/21 6/25/21 9/24/21 12/31/21 4/1/22 7/1/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 Warner Music Group Corp. $ 100 $ 102 $ 91 $ 126 $ 114 $ 127 $ 149 $ 148 $ 136 $ 99 $ 95 $ 121 $ 116 $ 91 $ 111 $ 127 $ 118 $ 110 $ 113 S&P 500 Index 100 98 108 119 127 134 139 146 141 125 119 123 132 143 137 153 168 175 185 NASDAQ Composite Index 100 102 116 129 132 142 149 156 148 125 120 113 136 156 152 173 188 203 207 Repurchase Program On November 14, 2024, the Company’s board of directors authorized a new $100 million share repurchase program, which is intended to offset dilution from the Omnibus Incentive Plan.
Biggest changeStarting with the 2023 fiscal year, the quarterly intervals below are based on the Company’s modified fiscal year in which each reporting period ends on the last day of the calendar quarter. 43 The comparisons in the graph below are based on historical data and are not indicative of, nor intended to forecast, future performance of our Class A Common Stock. 9/25/20 12/24/20 3/26/21 6/25/21 9/24/21 12/31/21 4/1/22 7/1/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 12/31/25 3/31/25 6/30/25 9/30/25 Warner Music Group Corp. $ 100 $ 139 $ 121 $ 137 $ 166 $ 163 $ 140 $ 94 $ 89 $ 135 $ 129 $ 102 $ 123 $ 141 $ 131 $ 122 $ 125 $ 131 $ 127 $ 111 $ 139 S&P 500 Index 100 113 121 131 137 147 141 119 112 121 130 141 136 152 168 175 186 218 182 202 219 Nasdaq Comp.
Because many of our shares of Class A Common Stock are held by brokers and other institutions on behalf of individuals and entities, we excluded the total number of beneficial owners represented by these record holders. As of November 15, 2024, there were 8 stockholders of record of our Class B Common Stock.
Because many of our shares of Class A Common Stock are held by brokers and other institutions on behalf of individuals and entities, we excluded the total number of beneficial owners represented by these record holders. As of November 14, 2025, there were 6 stockholders of record of our Class B Common Stock.
The Company's Class B Common Stock is not listed on any stock exchange nor traded on any public market. Holders of Record As of November 15, 2024, there were approximately 15 stockholders of record of the Company's Class A Common Stock.
The Company's Class B Common Stock is not listed on any stock exchange nor traded on any public market. Holders of Record As of November 14, 2025, there were approximately 11 stockholders of record of the Company's Class A Common Stock.
The following graph shows a comparison of the cumulative total return on our Class A Common Stock from June 3, 2020 (the date our Class A Common Stock commenced trading on the Nasdaq Global Select Market) through September 30, 2024 with the cumulative total return of the Standard & Poor’s 500 Index (“S&P 500 Index”) and the Nasdaq Composite Index over the same period, assuming the investment of $100 in our Class A Common Stock and in each index on June 3, 2020 and the reinvestment of dividends in each of our Class A Common Stock and each index.
The following graph shows a comparison of the cumulative total return on our Class A Common Stock from September 25, 2020 through September 30, 2025 with the cumulative total return of the Standard & Poor’s 500 Index (“S&P 500 Index”) and the Nasdaq Composite Index over the same period, assuming the investment of $100 in our Class A Common Stock and in each index on September 25, 2020 and the reinvestment of dividends in each of our Class A Common Stock and each index.
Removed
The graph uses the closing market price on June 3, 2020 of $30.12 per share as the initial value of our common stock, which had an initial public offering price of $25.00.
Added
Index 100 118 121 132 139 145 132 103 98 98 114 129 124 141 154 167 172 215 164 193 216 Repurchase Program On November 14, 2024, the Company’s board of directors authorized a $100 million share repurchase program, which is intended to offset dilution from the Omnibus Incentive Plan.
Removed
The authorization for the share repurchase program may be suspended, terminated, increased or decreased by the board of directors at any time. Securities Authorized for Issuance Under Equity Compensation Plans See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ITEM 6. [RESERVED] 42
Added
The authorization for the share repurchase program may be suspended, terminated, increased or decreased by the board of directors at any time. 44 The following table provides information about purchases made by or on behalf of the Company of the Company’s Class A common stock during the three months ended September 30, 2025: Period Total Number of Shares Repurchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) July 2025 — $ — — $ — August 2025 90,301 $ 32.51 90,301 $ 94 September 2025 306,597 $ 32.96 306,597 $ 84 Securities Authorized for Issuance Under Equity Compensation Plans See Item 12.
Added
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ITEM 6. [RESERVED] 45

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

188 edited+35 added−119 removed149 unchanged
Biggest changeNoncontrolling interest 2024 vs. 2023 There was $43 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2024, an increase of $34 million, from $9 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2023, driven by higher income from non-wholly-owned subsidiaries in the current year, primarily due to the impact of the Licensing Extension. 2023 vs. 2022 There was $9 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2023, an increase from $4 million of income attributable to noncontrolling interest for the fiscal year ended September 30, 2022, driven by higher income from non-wholly-owned subsidiaries in the fiscal year ended September 30, 2023. 59 Business Segment Results Revenues, operating income (loss) and Adjusted OIBDA by business segment were as follows (in millions): For the Fiscal Year Ended September 30, 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 $ Change % Change $ Change % Change Recorded Music Revenues $ 5,223 $ 4,955 $ 4,966 $ 268 5 % $ (11) — % Operating income 916 875 796 41 5 % 79 10 % Adjusted OIBDA 1,282 1,094 1,046 188 17 % 48 5 % Music Publishing Revenues 1,210 1,088 958 122 11 % 130 14 % Operating income 238 200 139 38 19 % 61 44 % Adjusted OIBDA 330 296 233 34 11 % 63 27 % Corporate expenses and eliminations Revenue eliminations (7) (6) (5) (1) 17 % (1) 20 % Operating loss (331) (285) (221) (46) 16 % (64) 29 % Adjusted OIBDA loss (180) (155) (130) (25) 16 % (25) 19 % Total Revenues 6,426 6,037 5,919 389 6 % 118 2 % Operating income 823 790 714 33 4 % 76 11 % Adjusted OIBDA 1,432 1,235 1,149 197 16 % 86 7 % Recorded Music Revenues 2024 vs. 2023 Recorded Music revenue increased by $268 million to $5,223 million for the fiscal year ended September 30, 2024 from $4,955 million for the fiscal year ended September 30, 2023.
Biggest changeBusiness Segment Results Revenues, operating income (loss) and Adjusted OIBDA by business segment were as follows (in millions): For the Fiscal Year Ended September 30, 2025 vs. 2024 2025 2024 $ Change % Change Recorded Music Revenues $ 5,408 $ 5,223 $ 185 4 % Operating income 850 916 (66) -7 % Adjusted OIBDA 1,269 1,282 (13) -1 % Music Publishing Revenues 1,306 1,210 96 8 % Operating income 224 238 (14) -6 % Adjusted OIBDA 361 330 31 9 % Corporate expenses and eliminations Revenue eliminations (7) (7) — — % Operating loss (380) (331) (49) 15 % Adjusted OIBDA loss (187) (180) (7) 4 % Total Revenues 6,707 6,426 281 4 % Operating income 694 823 (129) -16 % Adjusted OIBDA 1,443 1,432 11 1 % Recorded Music Revenues Recorded Music revenue increased by $185 million to $5,408 million for the fiscal year ended September 30, 2025 from $5,223 million for the fiscal year ended September 30, 2024.
The Additional Notes have identical terms as (other than the issue date and the issue price) and are fungible with, and treated as a single series of senior secured debt securities with, the 3.000% Senior Secured Notes issued on August 12, 2020 (the “Original Notes”). 2.250% Senior Secured Notes On August 16, 2021, Acquisition Corp. issued and sold €445 million in aggregate principal amount of its 2.250% Senior Secured Notes due 2031 (the “2.250% Senior Secured Notes”) under the Senior Secured Base Indenture, as supplemented by the Fifth Supplemental Indenture, dated as of August 16, 2021, among Acquisition Corp., the guarantors party thereto and the Trustee (the “2.250% Supplemental Indenture”).
The Additional Notes have identical terms as (other than the issue date and the issue price), are fungible with, and are treated as a single series of senior secured debt securities with, the 3.000% Senior Secured Notes issued on August 12, 2020 (the “Original Notes”). 2.250% Senior Secured Notes On August 16, 2021, Acquisition Corp. issued and sold €445 million in aggregate principal amount of its 2.250% Senior Secured Notes due 2031 (the “2.250% Senior Secured Notes”) under the Senior Secured Base Indenture, as supplemented by the Fifth Supplemental Indenture, dated as of August 16, 2021, among Acquisition Corp., the guarantors party thereto and the Trustee (the “2.250% Supplemental Indenture”).
The loans under the Revolving Credit Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Revolving Term SOFR”), and other rates for alternate currencies, such as EURIBOR and SONIA, as provided in the Revolving Credit Agreement, subject to a zero floor, plus 1.75% per annum in the case of Initial Revolving Loans (as defined in the Revolving Credit Agreement), or 1.875% per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from 68 time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0% per annum, plus, in each case, 0.75% per annum in the case of Initial Revolving Loans, or 0.875% per annum in the case of 2020 Revolving Loans; provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement.
The loans under the Revolving Credit Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Revolving Term SOFR”), and other rates for alternate currencies, such as EURIBOR and SONIA, as provided in the Revolving Credit Agreement, subject to a zero floor, plus 1.75% per annum in the case of Initial Revolving Loans (as defined in the Revolving Credit Agreement), or 1.875% per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0% per annum, plus, in each case, 0.75% per annum in the case of Initial Revolving Loans, or 0.875% per annum in the case of 2020 Revolving Loans; provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement.
We have an extensive production music catalog collectively branded as Warner Chappell Production Music. 45 Music Publishing revenues are derived from five main sources: • Digital: the rightsholder receives revenues with respect to musical compositions embodied in recordings distributed in streaming services, download services, digital performance and other digital music services; • Performance: the rightsholder receives revenues if the musical composition is performed publicly through broadcast of music on television, radio and cable and in retail locations (e.g., bars and restaurants), live performance at a concert or other venue (e.g., arena concerts and nightclubs), and performance of music in staged theatrical productions; • Mechanical: the rightsholder receives revenues with respect to musical compositions embodied in recordings sold in any physical format or configuration such as vinyl, CDs and DVDs; • Synchronization: the rightsholder receives revenues for the right to use the musical composition in combination with visual images such as in films or television programs, television commercials and video games as well as from other uses such as in toys or novelty items and merchandise; and • Other: the rightsholder receives revenues for use in sheet music and other uses.
We have an extensive production music catalog collectively branded as Warner Chappell Production Music. 48 Music Publishing revenues are derived from five main sources: • Digital: the rightsholder receives revenues with respect to musical compositions embodied in recordings distributed in streaming services, download services, digital performance and other digital music services; • Performance: the rightsholder receives revenues if the musical composition is performed publicly through broadcast of music on television, radio and cable and in retail locations (e.g., bars and restaurants), live performance at a concert or other venue (e.g., arena concerts and nightclubs), and performance of music in staged theatrical productions; • Mechanical: the rightsholder receives revenues with respect to musical compositions embodied in recordings sold in any physical format or configuration such as vinyl, CDs and DVDs; • Synchronization: the rightsholder receives revenues for the right to use the musical composition in combination with visual images such as in films or television programs, television commercials and video games as well as from other uses such as in toys or novelty items and merchandise; and • Other: the rightsholder receives revenues for use in sheet music and other uses.
Events of Default Events of default under the Revolving Credit Facility, the New Senior Term Loan Facility and the Secured Notes Indenture include, as applicable, nonpayment of principal when due, nonpayment of interest or other amounts, inaccuracy of representations or warranties in any material respect, violation of covenants, cross default and cross acceleration to other material debt, certain bankruptcy or insolvency events, certain ERISA events, certain material judgments, actual or asserted invalidity of security interests in excess of $50 million, or $75 million in the case of the Secured Notes Indenture, in each case subject to customary thresholds, notice and grace period provisions. 73 Change of Control Upon the occurrence of a change of control triggering event, which is defined in the Secured Notes Indenture, each holder of the Secured Notes has the right to require Acquisition Corp. to repurchase some or all of such holder’s Secured Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
Events of Default Events of default under the Revolving Credit Facility, the New Senior Term Loan Facility and the Secured Notes Indenture include, as applicable, nonpayment of principal when due, nonpayment of interest or other amounts, inaccuracy of representations or warranties in any material respect, violation of covenants, cross default and cross acceleration to other material debt, certain bankruptcy or insolvency events, certain ERISA events, certain material judgments, actual or asserted invalidity of security interests in excess of $50 million, or $75 million in the case of the Secured Notes Indenture, in each case subject to customary thresholds, notice and grace period provisions. 68 Change of Control Upon the occurrence of a change of control triggering event, which is defined in the Secured Notes Indenture, each holder of the Secured Notes has the right to require Acquisition Corp. to repurchase some or all of such holder’s Secured Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
Revolving Credit Facility On January 31, 2018, Acquisition Corp. entered into the revolving credit agreement (as amended by the amendment dated October 9, 2019 and as further amended, amended and restated or otherwise modified from time to time, the “Revolving Credit 67 Agreement”) for a senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the “Revolving Credit Facility”).
Revolving Credit Facility On January 31, 2018, Acquisition Corp. entered into the revolving credit agreement (as amended by the amendment dated October 9, 2019 and as further amended, amended and restated or otherwise modified from time to time, the “Revolving Credit Agreement”) for a senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the “Revolving Credit Facility”).
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.
There can be no assurances that any such cost savings or synergies will be achieved in full. 70 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.
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. 75 The following is a reconciliation of net income, which is a 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. The following is a reconciliation of net income, which is a U.S.
On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were 76 suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein.
On May 4, 2021, certain covenants set forth in our Revolving Credit Facility were suspended, including the restriction on incurring certain additional indebtedness, based on the determination that the total indebtedness to EBITDA ratio is below the required threshold specified therein.
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.” Use of Constant Currency As exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of revenue and Adjusted OIBDA on a constant-currency basis in addition to reported results helps improve the ability to understand our 43 operating results and evaluate our performance in comparison to prior periods.
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.” 46 Use of Constant Currency As exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of revenue and Adjusted OIBDA on a constant-currency basis in addition to reported results helps improve the ability to understand our operating results and evaluate our performance in comparison to prior periods.
Assembled over decades, our award-winning catalog includes over 180,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel. Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios.
Assembled over decades, our award-winning catalog includes over 190,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel. Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios.
These obligations have been presented based on the principal amounts due as of September 30, 2024. Amounts do not include any fair value adjustments, bond premiums, discounts or unamortized deferred financing costs. (2) Operating lease obligations primarily relate to the minimum lease rental obligations for our real estate and operating equipment in various locations around the world.
These obligations have been presented based on the principal amounts due as of September 30, 2025. Amounts do not include any fair value adjustments, bond premiums, discounts or unamortized deferred financing costs. (2) Operating lease obligations primarily relate to the minimum lease rental obligations for our real estate and operating equipment in various locations around the world.
The Company’s revenue recognition process involves several applications that are responsible for the initiation and processing of transactions in order to recognize revenue in accordance with the Company’s policy and ASC 606. 79 Revenues from the sale or license of Recorded Music products through digital distribution channels are typically recognized when sale or usage occurs based on usage reports received from the customer.
The Company’s revenue recognition process involves several applications that are responsible for the initiation and processing of transactions in order to recognize revenue in accordance with the Company’s policy and ASC 606. 74 Revenues from the sale or license of Recorded Music products through digital distribution channels are typically recognized when sale or usage occurs based on usage reports received from the customer.
The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the Company’s restructuring plans. The decrease in distribution expense was primarily due to revenue mix and lower merchandising revenue.
The decrease in selling and marketing expense was primarily due to lower variable marketing spend and savings from the Company’s restructuring plans. The decrease in distribution expense was primarily due to revenue mix.
In addition, the reconciliation includes the calculation of the Senior Secured Indebtedness to Adjusted EBITDA ratio, which we refer to as the Leverage Ratio, under the Revolving Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended September 30, 2024. The terms and related calculations are defined in the Revolving Credit Agreement.
In addition, the reconciliation includes the calculation of the Senior Secured Indebtedness to Adjusted EBITDA ratio, which we refer to as the Leverage Ratio, under the Revolving Credit Agreement for the most recently ended four fiscal quarters, or the twelve months ended September 30, 2025. The terms and related calculations are defined in the Revolving Credit Agreement.
In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels. Our Recorded Music business’ operations include WMX, a next generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways.
In certain smaller markets, we license the right to distribute and sell our music to non-affiliated third-party record labels. Our Recorded Music business’s operations include WMX, a next generation services division that connects artists with fans and amplifies brands in creative, immersive, and engaging ways.
Additionally, at any time prior to December 1, 2024, the 3.750% Senior Secured Notes may be redeemed pursuant to an Equity Redemption at a redemption price equal to 103.750% of the principal 72 amount of the 3.750% Senior Secured Notes redeemed, plus accrued and unpaid interest, subject to the same provisos as the 3.875% Senior Secured Notes Equity Redemption.
Additionally, at any time prior to December 1, 2024, the 3.750% Senior Secured Notes may be redeemed pursuant to an Equity Redemption at a redemption price equal to 103.750% of the principal 67 amount of the 3.750% Senior Secured Notes redeemed, plus accrued and unpaid interest, subject to the same provisos as the 3.875% Senior Secured Notes Equity Redemption.
Other expense (income) 2024 vs. 2023 Other expense for the fiscal year ended September 30, 2024 primarily includes foreign currency losses on our Euro-denominated debt of $47 million, and currency exchange losses on our intercompany loans of $26 million, partially offset by income earned on equity method investments of $8 million.
Other expense for the fiscal year ended September 30, 2024 primarily includes foreign currency losses on our Euro-denominated debt of $47 million, and currency exchange losses on our intercompany loans of $26 million, partially offset by income earned on equity method investments of $8 million.
We also work side-by-side with our online and mobile partners to test new concepts. We believe existing and new digital businesses will be a significant source of growth and will provide new opportunities to successfully monetize our assets 44 and create new revenue streams.
We also work side-by-side with our online and mobile partners to test new concepts. We believe existing and 47 new digital businesses will be a significant source of growth and will provide new opportunities to successfully monetize our assets and create new revenue streams.
We test our goodwill and other indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter of each fiscal year as of July 1. We performed a qualitative assessment for our reporting units and other indefinite-lived intangible assets in fiscal 2024.
We test our goodwill and other indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter of each fiscal year as of July 1. We performed a qualitative assessment for our reporting units and other indefinite-lived intangible assets in fiscal 2025.
In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, we may seek to refinance the Senior Credit Facilities or our outstanding debt or debt securities with existing cash and/or with funds provided from additional borrowings. 77 Contractual and Other Obligations Firm Commitments The following table summarizes the Company’s aggregate contractual obligations at September 30, 2024, and the estimated timing and effect that such obligations are expected to have on the Company’s liquidity and cash flow in future periods.
In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, we may seek to refinance the Senior Credit Facilities or our outstanding debt or debt securities with existing cash and/or with funds provided from additional borrowings. 72 Contractual and Other Obligations Firm Commitments The following table summarizes the Company’s aggregate contractual obligations at September 30, 2025, and the estimated timing and effect that such obligations are expected to have on the Company’s liquidity and cash flow in future periods.
This is calculated net of cash and equivalents of the Company as of September 30, 2024 not exceeding $750 million in accordance with the Sixth Revolving Credit Agreement Amendment as described further in Note 10.
This is calculated net of cash and equivalents of the Company as of September 30, 2025 not exceeding $750 million in accordance with the Sixth Revolving Credit Agreement Amendment as described further in Note 10.
If there is a payment default at any time, then the interest rate applicable to overdue principal and interest will be the rate otherwise applicable to such loan 70 plus 2.00% per annum.
If there is a payment default at any time, then the interest rate applicable to overdue principal and interest will be the rate otherwise applicable to such loan 65 plus 2.00% per annum.
Our business’ distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors; and various distribution centers and ventures operated internationally.
Our business’s distribution operations also include Alternative Distribution Alliance (“ADA”), which markets, distributes and sells the products of independent labels to retail and wholesale distributors; and various distribution centers and ventures operated internationally.
GAAP measure of our operating results, to Adjusted EBITDA as defined, for the most recently ended four fiscal quarters, or the twelve months ended September 30, 2024, for the twelve months ended September 30, 2023 and for the three months ended September 30, 2024 and September 30, 2023.
GAAP measure of our operating results, to Adjusted EBITDA as defined, for the most recently ended four fiscal quarters, or the twelve months ended September 30, 2025, for the twelve months ended September 30, 2024 and for the three months ended September 30, 2025 and September 30, 2024.
We had $2,549 million and $2,219 million of royalty payables in our balance sheet at September 30, 2024 and September 30, 2023, respectively. In many instances, the Company commits to pay our recording artists and songwriters royalties in advance of future sales. The Company accounts for these advances under the related guidance in FASB ASC Topic 928, Entertainment—Music (“ASC 928”).
We had $2,740 million and $2,549 million of royalty payables in our balance sheet at September 30, 2025 and September 30, 2024, respectively. In many instances, the Company commits to pay our recording artists and songwriters royalties in advance of future sales. The Company accounts for these advances under the related guidance in FASB ASC Topic 928, Entertainment—Music (“ASC 928”).
In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 180,000 songwriters and composers, with a global collection of more than one and a half million musical compositions. We classify our business interests into two fundamental operations: Recorded Music and Music Publishing.
In addition, Warner Chappell Music, our global music publishing business, boasts an extraordinary catalog that includes timeless standards and contemporary hits, representing works by over 190,000 songwriters and composers, with a global collection of more than two million musical compositions. We classify our business interests into two fundamental operations: Recorded Music and Music Publishing.
In addition, our weighted-average interest rate on our outstanding indebtedness has decreased from 10.5% in 2011 to 4.3% as of September 30, 2024. Our nearest-term maturity date is in 2028. Subject to market conditions, we expect to continue to take opportunistic steps to extend our maturity dates and reduce related interest expense.
In addition, our weighted-average interest rate on our outstanding indebtedness has decreased from 10.5% in 2011 to 4.1% as of September 30, 2025. Our nearest-term maturity date is in 2028. Subject to market conditions, we expect to continue to take opportunistic steps to extend our maturity dates and reduce related interest expense.
Interest on the Term Loan Mortgage will accrue at a rate of 30-day Secured Overnight Financing Rate (“SOFR”) plus the applicable margin of 1.40% subject to a zero floor. Equal principal installments and interest are due monthly. The outstanding balance for the Term Loan Mortgage as of September 30, 2024 was $18 million.
Interest on the Term Loan Mortgage will accrue at a rate of 30-day Secured Overnight Financing Rate (“SOFR”) plus the applicable margin of 1.40% subject to a zero floor. Equal principal installments and interest are due monthly. The outstanding balance for the Term Loan Mortgage as of September 30, 2025 was $17 million.
(d) Reflects unrealized losses (gains) due to foreign exchange on our Euro-denominated debt, losses (gains) from foreign currency forward exchange contracts and intercompany transactions.
(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.
(4) We have minimum funding commitments and other related obligations to support the operations of various investments, which are reflected in the table above. Other long-term liabilities, which are not included in the table above, include $10 million and $13 million of liabilities for uncertain tax positions as of September 30, 2024 and September 30, 2023, respectively.
(4) We have minimum funding commitments and other related obligations to support the operations of various investments, which are reflected in the table above. Other long-term liabilities, which are not included in the table above, include $12 million and $10 million of liabilities for uncertain tax positions as of September 30, 2025 and September 30, 2024, respectively.
Recent Accounting Pronouncements Refer to Note 2 to our consolidated financial statements included elsewhere herein for more information regarding recently issued accounting pronouncements. 80
Recent Accounting Pronouncements Refer to Note 2 to our consolidated financial statements included elsewhere herein for more information regarding recently issued accounting pronouncements. 75
We also conduct our Recorded Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, TenThousand Projects, Warner Classics and Warner Music Nashville. Outside the United States, our Recorded Music business is conducted in more than 70 countries through various subsidiaries, affiliates and non-affiliated licensees.
We also conduct our Recorded Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, TenThousand Projects, Warner Classics and Warner Records Nashville. Outside the United States, our Recorded Music business is conducted through various subsidiaries, affiliates and non-affiliated licensees.
Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.05x at September 30, 2024, the applicable margin for SOFR loans and RFR loans would be 1.375% instead of 1.875% and the applicable margin for ABR loans would be 0.375% instead of 0.875% in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement).
Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.02x at September 30, 2025, the applicable margin for SOFR loans and RFR loans would be 1.375% instead of 1.875% and the applicable margin for ABR loans would be 0.375% instead of 0.875% in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement).
See Note 9 to the consolidated financial statements for a further discussion of our goodwill and intangible assets.
See Note 8 to the consolidated financial statements for a further discussion of our goodwill and intangible assets.
The overall increase in Music Publishing revenue was driven by growth in digital, performance and mechanical revenue, partially offset by lower synchronization revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
The overall increase in Music Publishing revenue was driven by growth in digital, performance, synchronization and mechanical revenue, as described in the “Total Revenues” and “Revenue by Geographical Location” sections above.
We had $1,344 million and $1,101 million of advances in our balance sheet at September 30, 2024 and September 30, 2023, respectively. We believe such advances are recoverable through future royalties to be earned by the applicable recording artists and songwriters.
We had $1,660 million and $1,344 million of advances in our balance sheet at September 30, 2025 and September 30, 2024, respectively. We believe such advances are recoverable through future royalties to be earned by the applicable recording artists and songwriters.
Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 29% for the fiscal year ended September 30, 2024 from 30% for the fiscal year ended September 30, 2023.
Expressed as a percentage of revenue, total selling, general and administrative expense decreased to 28% for the fiscal year ended September 30, 2025 from 29% for the fiscal year ended September 30, 2024.
Certain of these cost savings initiatives and transactions impacted quarters prior to the quarter during which they were identified within the last twelve-month period. The pro forma impact of these specified transactions and initiatives resulted in a $59 million increase in the twelve months ended September 30, 2024 Adjusted EBITDA.
Certain of these cost savings initiatives and transactions impacted quarters prior to the quarter during which they were identified within the last twelve-month period. The pro forma impact of 71 these specified transactions and initiatives resulted in a $125 million increase in the twelve months ended September 30, 2025 Adjusted EBITDA.
The financial data for fiscal years ended September 30, 2024, 2023 and 2022 have been derived from our consolidated financial statements included elsewhere herein.
The financial data for the fiscal years ended September 30, 2025 and September 30, 2024 have been derived from our consolidated financial statements included elsewhere herein.
There were no loans outstanding under the Revolving Credit Facility at September 30, 2024.
There were no loans outstanding under the Revolving Credit Facility at September 30, 2025.
The cost savings under the Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of the O&O Media Properties, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformative initiative.
The cost savings under the 2024 Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of non-core operations, continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformative initiative.
International Recorded Music revenues were $3,013 million and $2,771 million, or 58% and 56% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2024 and September 30, 2023, respectively. The overall increase in Recorded Music revenue was driven by increases in digital, licensing, and physical revenues, partially offset by a decrease in artist services and expanded-rights revenues.
International Recorded Music revenues were $3,227 million and $3,013 million, or 60% and 58% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively. The overall increase in Recorded Music revenue was driven by increases in digital, artist services and expanded-rights, and physical revenues, partially offset by a decrease in licensing revenue.
(h) Reflects expected savings resulting from transformation initiatives, including the Strategic Restructuring Plan and the 2023 Restructuring Plan, and the pro forma impact of certain specified transactions for the three and twelve months ended September 30, 2024.
(f) Reflects expected savings resulting from transformation initiatives, including the 2025 Restructuring Plan, the 2024 Strategic Restructuring Plan, and the 2023 Restructuring Plan, as well as the pro forma impact of certain specified transactions for the three and twelve months ended September 30, 2025.
On June 30, 2023, Acquisition Corp. entered into an increase supplement (the “Third Increase Supplement”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the guarantors party thereto, the lender party thereto and Credit Suisse AG, as administrative agent, pursuant to which Acquisition Corp. has borrowed additional Tranche G term loans in an amount equal to $150 million, the proceeds of which have been used to prepay the Tranche H term loans in full (see “Senior Term Loan Facility Amendment”), for an aggregate principal amount outstanding under the Senior Term Loan Credit Agreement of $1,295 million.
The Senior Term Loan Credit Agreement Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate. 64 On June 30, 2023, Acquisition Corp. entered into an increase supplement (the “Third Increase Supplement”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the guarantors party thereto, the lender party thereto and Credit Suisse AG, as administrative agent, pursuant to which Acquisition Corp. has borrowed additional Tranche G term loans in an amount equal to $150 million, the proceeds of which have been used to prepay the Tranche H term loans in full (see “Senior Term Loan Facility Amendment”), for an aggregate principal amount outstanding under the Senior Term Loan Credit Agreement of $1,295 million.
Financing Activities Cash used in financing activities was $396 million for the fiscal year ended September 30, 2024 compared to cash used in financing activities of $325 million for the fiscal year ended September 30, 2023 and cash provided by financing activities of $188 million for the fiscal year ended September 30, 2022. 66 The $396 million of cash used in financing activities for the fiscal year ended September 30, 2024 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $20 million, dividends paid of $361 million, deferred financing costs of $2 million, distributions to noncontrolling interest holders of $8 million, and taxes paid to net share settle restricted stock units and Class A common shares of $5 million.
The $396 million of cash used in financing activities for the fiscal year ended September 30, 2024 consisted of cash paid to settle deferred consideration related to prior year acquisitions of music publishing rights and music catalogs of $20 million, dividends paid of $361 million, deferred financing costs of $2 million, distributions to noncontrolling interest holders of $8 million, and taxes paid to net share settle restricted stock units and Class A common shares of $5 million.
International Music Publishing revenues were $550 million and $506 million, or 45% and 47% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2024 and September 30, 2023, respectively.
International Music Publishing revenues were $613 million and $550 million, or 47% and 45% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
On November 8, 2024, the Company’s board of directors declared a cash dividend of $0.18 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, payable on December 3, 2024 to stockholders of record as of the close of business on November 19, 2024.
On November 7, 2025, the Company’s board of directors declared a cash dividend of $0.19 per share on the Company’s Class A Common Stock and Class B, as well as related payments under certain stock-based compensation plans, payable on December 2, 2025 to stockholders of record as of the close of business on November 19, 2025.
Based on contractual obligations and the Company’s expected release schedule, off-balance sheet aggregate firm commitments to such talent approximated $558 million at September 30, 2024. The aggregate firm commitments expected for the next twelve-month period based on contractual obligations and the Company’s expected release schedule approximates $329 million at September 30, 2024.
Based on contractual obligations and the Company’s expected release schedule, off-balance sheet aggregate firm commitments to such talent approximated $593 million at September 30, 2025. The aggregate firm commitments expected for the next twelve-month period based on contractual obligations and the Company’s expected release schedule approximates $348 million at September 30, 2025.
The Company paid cash dividends to stockholders and participating security holders of $361 million, $340 million and $318 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively. Covenant Compliance The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of September 30, 2024.
The Company paid cash dividends to stockholders and participating security holders of $383 million and $361 million for the fiscal years ended September 30, 2025 and 2024, respectively. Covenant Compliance The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility, the Senior Term Loan Facility, and the Asset-Based Notes as of September 30, 2025.
Expressed as a percentage of revenue, selling and marketing expense decreased to 11% for the fiscal year ended September 30, 2024 from 12% for the fiscal year ended September 30, 2023 due to lower variable marketing spend and an increase in savings from the Company’s restructuring plans.
Expressed as a percentage of revenue, selling and marketing expense decreased to 10% for the fiscal year ended September 30, 2025 from 11% for the fiscal year ended September 30, 2024 due to lower variable marketing spend and savings from the Company’s restructuring plans.
As of September 30, 2024, we had recorded goodwill in the amount of $2.021 billion, including $1.557 billion and $464 million for our Recorded Music and Music Publishing businesses, respectively, primarily related to the Merger and PLG Acquisition. As of September 30, 2024, we had recorded indefinite-lived intangible assets of $152 million.
As of September 30, 2025, we had recorded goodwill in the amount of $2.061 billion, including $1.597 billion and $464 million for our Recorded Music and Music Publishing businesses, respectively, primarily related to the Merger and PLG Acquisition. As of September 30, 2025, we had recorded indefinite-lived intangible assets of $154 million.
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 Ba2 in April 2023 with a positive outlook updated in April 2024. In September 2024, Fitch assigned us a BBB- long-term credit rating with a stable outlook.
For example, our S&P corporate credit rating improved from B in 2017 to BBB- in August 2024 with a stable outlook, and our Moody’s corporate family rating improved from B1 in 2016 to Ba1 in March 2025 with a positive outlook update. In September 2025, Fitch assigned us a BBB- long-term credit rating with a stable outlook.
International Recorded Music physical revenue increased by $11 million, driven by strength of new releases primarily in Japan, and a favorable impact of foreign currency exchange rates of $1 million.
International Recorded Music physical revenue increased by $9 million, driven by strength of new releases primarily in Asia, and a favorable impact of foreign currency exchange rates of $5 million.
U.S. Recorded Music revenues were $2,210 million and $2,184 million, or 42% and 44% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2024 and September 30, 2023, respectively.
U.S. Recorded Music revenues were $2,181 million and $2,210 million, or 40% and 42% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
See “Special Note Regarding Forward-Looking Statements.” You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report. INTRODUCTION The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp.
See “Special Note Regarding Forward-Looking Statements.” You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report.
Recorded Music revenues were $2,210 million and $2,184 million, or 42% and 44% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2024 and September 30, 2023, respectively.
Recorded Music revenues were $2,181 million and $2,210 million, or 40% and 42% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
U.S. Music Publishing revenues were $660 million and $582 million, or 55% and 53% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2024 and September 30, 2023, respectively.
Music Publishing revenues were $693 million and $660 million, or 53% and 55% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
There were no drawdowns on the Revolving Credit Facility during the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022. 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.
There were no drawdowns on the Revolving Credit Facility or Beethoven Credit Agreement (as defined below) during the fiscal years ended September 30, 2025 and September 30, 2024. 61 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.
Music Publishing revenues were $660 million and $582 million, or 55% and 53% of consolidated Music Publishing revenues, for the fiscal year ended September 30, 2024 and September 30, 2023, respectively.
Music Publishing revenues were $693 million and $660 million, or 53% and 55% of consolidated Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
International Music Publishing revenues were $550 million and $506 million, or 45% and 47% of Music Publishing revenues, for the fiscal year ended September 30, 2024 and September 30, 2023, respectively.
International Music Publishing revenues were $613 million and $550 million, or 47% and 45% of Music Publishing revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
General and administrative expense increased by $98 million to $1,089 million for the fiscal year ended September 30, 2024 from $991 million for the fiscal year ended September 30, 2023.
General and administrative expense increased by $46 million to $1,135 million for the fiscal year ended September 30, 2025 from $1,089 million for the fiscal year ended September 30, 2024.
Restructuring and Impairments 2024 vs. 2023 Our restructuring and impairment charges increased to $177 million for the fiscal year ended September 30, 2024, from $42 million for the fiscal year ended September 30, 2023.
Restructuring and Impairments Our restructuring and impairment charges increased $57 million to $234 million for the fiscal year ended September 30, 2025, from $177 million for the fiscal year ended September 30, 2024.
International Recorded Music revenues were $3,013 million and $2,771 million, or 58% and 56% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2024 and September 30, 2023, respectively.
International Recorded Music revenues were $3,227 million and $3,013 million, or 60% and 58% of consolidated Recorded Music revenues, for the fiscal years ended September 30, 2025 and September 30, 2024, respectively.
(e) Reflects costs associated with our transformation initiatives and IT system updates, which includes costs of $20 million and $76 million related to our finance transformation for the three and twelve months ended September 30, 2024, respectively, as well as $14 million and $53 million for the three and twelve months ended September 30, 2023, respectively.
(c) Reflects costs associated with our transformation initiatives and technology system updates, which includes costs of $17 million and $70 million related to our finance transformation for the three and twelve months ended September 30, 2025, respectively, as well as $20 million and $76 million for the three and twelve months ended September 30, 2024, respectively.
The Sixth Revolving Credit Agreement Amendment amended the First Lien Indebtedness to EBITDA Ratio, the Senior Secured Indebtedness to EBITDA Ratio and the Total Indebtedness to EBITDA Ratio, in each case so that the applicable ratio is calculated net of up to $750 million of cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries as of the date of determination.
The Sixth Revolving Credit Agreement Amendment amended the First Lien Indebtedness to EBITDA Ratio, the Senior Secured Indebtedness to EBITDA Ratio and the Total Indebtedness to EBITDA Ratio, in each case so that the applicable ratio is calculated net of up to $750 million of cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries as of the date of determination. 63 Acquisition Corp. is the borrower under the Revolving Credit Agreement which provides for a revolving credit facility in the amount of up to $350 million and includes a $90 million letter of credit sub-facility.
Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 29% for the fiscal year ended September 30, 2023 from 31% for the fiscal year ended September 30, 2022.
Expressed as a percentage of Recorded Music revenue, Recorded Music selling, general and administrative expense decreased to 26% for the fiscal year ended September 30, 2025 from 27% for the fiscal year ended September 30, 2024.
Recorded Music revenues increased by $268 million, or 5%, to $5,223 million for the fiscal year ended September 30, 2024 from $4,955 million for the fiscal year ended September 30, 2023. The increase includes $7 million of unfavorable currency exchange fluctuations. U.S.
Recorded Music revenues increased by $185 million, or 4%, to $5,408 million for the fiscal year ended September 30, 2025 from $5,223 million for the fiscal year ended September 30, 2024. The increase includes $6 million of favorable currency exchange fluctuations. U.S.
This compares to $3.964 billion of debt (which is net of $38 million of premiums, discounts and deferred financing costs), $641 million of cash and equivalents (net debt of $3.323 billion) and $307 million of Warner Music Group Corp. equity at September 30, 2023. Cash Flows The following table summarizes our historical cash flows (in millions).
This compares to $4.014 billion of debt (which is net of $34 million of premiums, discounts and deferred financing costs), $694 million of cash and equivalents (net debt of $3.320 billion) and $518 million of Warner Music Group Corp. equity at September 30, 2024. Cash Flows The following table summarizes our historical cash flows (in millions).
Cost of revenues Music Publishing cost of revenues was composed of the following amounts (in millions): For the Fiscal Year Ended September 30, 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 $ Change % Change $ Change % Change Artist and repertoire costs $ 763 $ 681 $ 620 $ 82 12 % $ 61 10 % Total cost of revenues $ 763 $ 681 $ 620 $ 82 12 % $ 61 10 % 2024 vs. 2023 Music Publishing cost of revenues increased by $82 million, or 12%, to $763 million for the fiscal year ended September 30, 2024 from $681 million for the fiscal year ended September 30, 2023.
Cost of revenues Music Publishing cost of revenues was composed of the following amounts (in millions): For the Fiscal Year Ended September 30, 2025 vs. 2024 2025 2024 $ Change % Change Artist and repertoire costs $ 821 $ 763 $ 58 8 % Total cost of revenues $ 821 $ 763 $ 58 8 % Music Publishing cost of revenues increased by $58 million, or 8%, to $821 million for the fiscal year ended September 30, 2025 from $763 million for the fiscal year ended September 30, 2024.
This section provides an analysis of our results of operations for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022. This analysis is presented on both a consolidated and segment basis. • Financial condition and liquidity.
This analysis is presented on both a consolidated and segment basis. • Financial condition and liquidity. This section provides an analysis of our cash flows for the fiscal years ended September 30, 2025 and September 30, 2024, as well as a discussion of our financial condition and liquidity as of September 30, 2025.
Expressed as a percentage of revenues, cost of revenues decreased to 52% for the fiscal year ended September 30, 2024 from 53% for the fiscal year ended September 30, 2023. Artist and repertoire costs increased by $169 million, to $2,167 million for the fiscal year ended September 30, 2024 from $1,998 million for the fiscal year ended September 30, 2023.
Expressed as a percentage of revenues, cost of revenues increased to 54% for the fiscal year ended September 30, 2025 from 52% for the fiscal year ended September 30, 2024. Artist and repertoire costs increased by $175 million, to $2,342 million for the fiscal year ended September 30, 2025 from $2,167 million for the fiscal year ended September 30, 2024.
On May 10, 2023, Acquisition Corp. entered into an amendment (the “Senior Term Loan Credit Agreement Amendment”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the guarantors party thereto and Credit Suisse AG, as administrative agent. The Senior Term Loan Credit Agreement Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate.
On May 10, 2023, Acquisition Corp. entered into an amendment (the “Senior Term Loan Credit Agreement Amendment”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the guarantors party thereto and Credit Suisse AG, as administrative agent.
Digital revenue increased by $197 million, or 6%, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in both subscription streaming and ad-supported streaming revenue.
Digital revenue increased by $75 million, or 2%, primarily due to growth in streaming revenue as a result of the continued growth in streaming services, including growth in subscription streaming revenue.
Music Publishing revenues increased by $122 million, or 11%, to $1,210 million for the fiscal year ended September 30, 2024 from $1,088 million for the fiscal year ended September 30, 2023. U.S.
Music Publishing revenues increased by $96 million, or 8%, to $1,306 million for the fiscal year ended September 30, 2025 from $1,210 million for the fiscal year ended September 30, 2024. U.S.
Expressed as a percentage of Recorded Music revenue, cost of revenues remained constant at 50% for each of the fiscal years ended September 30, 2023 and September 30, 2022.
Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues remained constant at 63% for each of the fiscal years ended September 30, 2025 and September 30, 2024.
Income tax expense 2024 vs. 2023 Our income tax expense decreased by $47 million to $123 million for the fiscal year ended September 30, 2024 from $170 million for the fiscal year ended September 30, 2023.
Income tax expense Our income tax expense decreased by $3 million to $120 million for the fiscal year ended September 30, 2025 from $123 million for the fiscal year ended September 30, 2024.
Investing Activities Cash used in investing activities was $311 million for the fiscal year ended September 30, 2024 compared to $300 million for the fiscal year ended September 30, 2023 and $824 million for the fiscal year ended September 30, 2022.
Investing Activities Cash used in investing activities was $340 million for the fiscal year ended September 30, 2025 compared to $311 million for the fiscal year ended September 30, 2024.
Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $25 million to $155 million for the fiscal year ended September 30, 2023 from $130 million for the fiscal year ended September 30, 2022 due to the operating loss factors noted above. 65 FINANCIAL CONDITION AND LIQUIDITY Financial Condition at September 30, 2024 At September 30, 2024, we had $4.014 billion of debt (which is net of $34 million of premiums, discounts and deferred financing costs), $694 million of cash and equivalents (net debt of $3.320 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $518 million of Warner Music Group Corp. equity.
Our Adjusted OIBDA loss from corporate expenses and eliminations increased by $7 million to $187 million for the fiscal year ended September 30, 2025 from $180 million for the fiscal year ended September 30, 2024 primarily due to the operating loss factors noted above. 60 FINANCIAL CONDITION AND LIQUIDITY Financial Condition at September 30, 2025 At September 30, 2025, we had $4.365 billion of debt (which is net of $36 million of premiums, discounts and deferred financing costs), $532 million of cash and equivalents (net debt of $3.833 billion, defined as total debt, less cash and equivalents and premiums, discounts and deferred financing costs) and $647 million of Warner Music Group Corp. equity.
Under the Senior Term Loan Facility, the Revolving Credit Facility and the Secured Notes Indenture, the Fixed GAAP Date is set for April 3, 2020, other than in respect of capital leases, which are frozen at November 1, 2012. 74 The Revolving Credit Facility contains a springing leverage ratio that is tied to a ratio based on EBITDA, which is defined under the Revolving Credit Agreement.
Under the Senior Term Loan Facility, the Revolving Credit Facility and the Secured Notes Indenture, the Fixed GAAP Date is set for April 3, 2020, other than in respect of capital leases, which are frozen at November 1, 2012.

… 262 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+4 added−1 removed3 unchanged
Biggest changeAt September 30, 2024, 68% of the Company’s debt was at a fixed rate. In addition, as of September 30, 2024, we have the option under all of our floating rate debt under the Senior Term Loan Facility to select a one, two, three or six month SOFR rate.
Biggest changeIn addition, as of September 30, 2025, we have the option under our floating rate loans under the Senior Term Loan Facility to select a one, two, three or six month SOFR rate. Based on the level of interest rates prevailing at September 30, 2025, the fair value of the Company’s fixed-rate and variable-rate debt was approximately $4.270 billion.
As of September 30, 2024, other than as described below, there have been no material changes to the Company’s exposure to market risk since September 30, 2023. 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.
As of September 30, 2025, other than as described below, there have been no material changes to the Company’s exposure to market risk since September 30, 2024. Foreign Currency Risk Within our global business operations, we have transactional exposures that may be adversely affected by changes in foreign currency exchange rates relative to the U.S. dollar.
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. 81
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. 76
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As discussed in Note 17 to our consolidated financial statements included herein, 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As discussed in Note 16 to our consolidated financial statements included herein, 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.
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, Korean won and Norwegian krone, 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 declines in the euro.
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.
Further, as of September 30, 2024, 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 $32 million or increase the fair value of the fixed-rate debt by approximately $33 million.
Further, as of September 30, 2025, based on the amount of the Company’s fixed-rate debt, a 25 basis point increase or decrease in the level of interest rates would decrease the fair value of the fixed-rate debt by approximately $30 million or increase the fair value of the fixed-rate debt by approximately $30 million.
As of September 30, 2024, the Company had no outstanding hedge contracts. Interest Rate Risk We had $4.048 billion of principal debt outstanding at September 30, 2024, of which $1.313 billion was variable-rate debt and $2.735 billion was fixed-rate debt. As such, we are exposed to changes in interest rates.
Interest Rate Risk We had $4.401 billion of principal debt outstanding at September 30, 2025, of which $1.312 billion was variable-rate debt and $3.089 billion was fixed-rate debt. As such, we are exposed to changes in interest rates. At September 30, 2025, 70% of the Company’s debt was at a fixed rate.
Removed
Based on the level of interest rates prevailing at September 30, 2024, the fair value of the Company’s fixed-rate and variable-rate debt was approximately $3.836 billion.
Added
As of September 30, 2025, the Company had outstanding foreign currency forward exchange contracts for sale of $460 million and the purchase of $170 million of foreign currencies at fixed rates. The fair value of foreign exchange contracts is subject to changes in foreign currency exchange rates.
Added
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.
Added
For foreign exchange forward contracts outstanding at September 30, 2025, we typically perform a sensitivity analysis assuming a hypothetical 10% depreciation of the U.S. dollar against foreign currencies from prevailing foreign currency exchange rates and assuming no change in interest rates. The fair value of the foreign exchange forward contracts would have decreased by $29 million based on this analysis.
Added
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.

Other WMG 10-K year-over-year comparisons