Warner Music(US:WMG)2025-11-20 12:42Restructuring Plans - The Company expects the 2025 Restructuring Plan to generate pre-tax cost savings of approximately $300 million annually by the end of fiscal year 2027[303]. - Total severance and other termination costs recorded in connection with the 2025 Restructuring Plan were $90 million for the fiscal year ended September 30, 2025[304]. - The 2024 Strategic Restructuring Plan is substantially complete, with remaining cash payments expected to be made by the end of fiscal year 2026[305]. - The Company anticipates incurring total charges of approximately $200 million on a pre-tax basis related to the 2025 Restructuring Plan[303]. - The company recognized total cumulative restructuring and impairment charges of $216 million related to the 2024 Strategic Restructuring Plan[310]. - The company reported a restructuring and severance expense of $107 million for the twelve months ended September 30, 2025[446]. Financial Performance - Total revenues increased by $281 million, or 4%, to $6,707 million for the fiscal year ended September 30, 2025, compared to $6,426 million for the fiscal year ended September 30, 2024[314]. - Adjusted OIBDA increased by $11 million to $1,443 million for the fiscal year ended September 30, 2025, from $1,432 million for the fiscal year ended September 30, 2024[334]. - Net income attributable to Warner Music Group Corp. decreased by $70 million, or 16%, to $365 million for the fiscal year ended September 30, 2025, from $435 million for the fiscal year ended September 30, 2024[333]. - For the twelve months ended September 30, 2025, net income was $370 million, compared to $478 million for the same period in 2024[446]. - Adjusted EBITDA for the twelve months ended September 30, 2025, was $1,752 million, an increase from $1,619 million in 2024[446]. Revenue Sources - Recorded Music revenues are derived from four main sources, including digital, physical, artist services, and licensing[302]. - Digital revenues increased by $113 million, or 3%, to $4,393 million for the fiscal year ended September 30, 2025, representing 65% of consolidated revenues[315]. - Recorded Music revenues increased by $185 million, or 4%, to $5,408 million for the fiscal year ended September 30, 2025, with international revenues accounting for 60% of total Recorded Music revenues[316]. - Artist services and expanded-rights revenue increased by $151 million, or 22%, primarily due to higher merchandising revenue and concert promotion[317]. - Music Publishing revenues increased by $96 million, or 8%, to $1,306 million for the fiscal year ended September 30, 2025, driven by growth in digital and performance revenues[318]. Costs and Expenses - Total cost of revenues increased by $277 million, or 8%, to $3,632 million for the fiscal year ended September 30, 2025, from $3,355 million for the fiscal year ended September 30, 2024[322]. - Artist and repertoire costs increased by $175 million, or 8%, to $2,342 million for the fiscal year ended September 30, 2025, from $2,167 million for the fiscal year ended September 30, 2024[323]. - Selling and marketing expense decreased by $43 million, or 6%, to $642 million for the fiscal year ended September 30, 2025, from $685 million for the fiscal year ended September 30, 2024[328]. - 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[327]. - Restructuring and impairment costs totaled $234 million for the fiscal year ended September 30, 2025, consisting of approximately $95 million of restructuring charges and approximately $139 million of non-cash impairment losses[330]. Debt and Liquidity - At September 30, 2025, total debt was $4.365 billion, compared to $4.014 billion at September 30, 2024[370]. - Cash and equivalents decreased to $532 million at September 30, 2025, from $694 million at September 30, 2024[370]. - The company believes its primary sources of liquidity will be sufficient to support existing operations over the next twelve months[382]. - As of September 30, 2025, total firm commitments and outstanding debt amounted to $6.580 billion, with $845 million due within one year[455]. - The company has additional borrowing capacity under its indentures and the Senior Term Loan Facility[452]. Market and Economic Factors - Inflationary factors such as increases in overhead costs may adversely affect the company's results of operations[476]. - The company does not believe that inflation has had a material effect on its business, financial condition, or results of operations to date[476]. - If costs become subject to significant inflationary pressures, the company may not be able to fully offset such higher costs through price increases for services[476]. - The inability to offset higher costs could harm the company's business, financial condition, or results of operations[476].