Financial Data and Key Metrics Changes - Total revenue increased by 7%, driven by a 9% growth in recorded music subscription streaming on an adjusted basis [5][20] - Total adjusted OIBDA rose by 22%, with a margin increase of 310 basis points [5][20] - Operating cash flow grew by 33%, achieving nearly 100% conversion of adjusted OIBDA [20][28] - Cash balance increased by over $200 million since the last quarter, reaching $751 million [21] Business Line Data and Key Metrics Changes - Recorded music streaming saw an 11% growth in subscription streaming, or 9% when adjusted for notable items [20] - Ad-supported streaming grew by 4%, while physical sales declined by 11% [20] - Artist services and expanded rights revenue increased by 13%, primarily due to concert promotion revenue in France [20] - Music publishing revenue grew by 9%, with a 15% growth when adjusted for notable items [20][86] Market Data and Key Metrics Changes - U.S. streaming market share grew by approximately one percentage point year-over-year, with a three percentage point increase on Spotify's Top 200 chart [7] - Internationally, the company achieved number one hits in multiple countries, including France, Italy, and China [8] Company Strategy and Development Direction - The company focuses on three strategic priorities: growing market share, increasing the value of music, and driving efficiency [5][11] - AI is being leveraged to enhance artist discovery, marketing, and operational efficiency [12][15] - The company is committed to ethical AI practices, ensuring artists have the right to opt-in for the use of their likeness in AI-generated content [15][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong momentum and a healthy industry outlook [16][30] - The company anticipates continued growth driven by strategic investments and favorable DSP agreements [30][50] - Management highlighted the importance of ethical AI deployment to protect artists while creating value [15][41] Other Important Information - The company has renewed its deal with TikTok, resulting in improved deal economics [11] - A significant increase in joint venture capacity with Bain from $1.2 billion to approximately $1.65 billion was announced [23][70] Q&A Session Summary Question: Can you expand on your AI philosophy and the financial impact of AI deals? - The company emphasizes ethical models in AI partnerships, ensuring proper licensing and artist rights [33][36] - Financially, the company expects material impacts from AI deals, with revenue sharing based on platform growth [42][43] Question: What is the outlook for paid streaming growth and potential growth accelerants? - The company is optimistic about transitioning to volume and value-led growth in streaming, with AI expected to introduce super premium tiers [49][50] Question: How is the company achieving consistent market share growth? - The company attributes growth to broad-based improvements across regions and business units, supported by strategic restructuring and investments in technology [55][56] Question: Can you provide insights on the performance of Music Publishing? - Music Publishing has seen double-digit growth, with a focus on A&R strategy and expansion in developing regions [86] Question: What is the response from artists regarding AI opportunities? - Artist engagement with AI initiatives has been high, with many expressing interest in participating [82][87]

Financial Data and Key Metrics Changes - Total revenue increased by 7%, driven by a 9% growth in recorded music subscription streaming on an adjusted basis [4][18] - Adjusted OIBDA rose by 22%, with a margin increase of over 300 basis points [18] - Operating cash flow grew by 33%, achieving nearly 100% conversion of adjusted OIBDA [18][19] - Cash balance increased by more than $200 million to $751 million [19] Business Line Data and Key Metrics Changes - Recorded music streaming saw subscription growth of 11% (9% adjusted for notable items) and ad-supported streaming grew by 4% [18] - Physical sales declined by 11% due to tough comparisons from the previous year [18] - Artist services and expanded rights revenue increased by 13%, primarily from concert promotion [18] - Music publishing revenue grew by 9%, with a 15% increase when adjusted for notable items [18] Market Data and Key Metrics Changes - U.S. streaming market share grew by approximately 1 percentage point year-over-year, with a 3 percentage point increase on Spotify's Top 200 chart [5] - Internationally, the company achieved number one hits in multiple countries, including France, Italy, and China [6] Company Strategy and Development Direction - The company focuses on three strategic priorities: growing market share, increasing the value of music, and driving efficiency [4][9] - AI is being leveraged to enhance artist discovery, marketing, and operational efficiency [10][12] - The company is committed to ethical AI practices, ensuring artists have control over their likeness and voice in AI-generated content [12][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong momentum and a healthy industry outlook [13][27] - The company anticipates continued growth driven by strategic investments and favorable DSP agreements [27][46] - Management highlighted the importance of adapting to market changes and leveraging new technologies for growth [36][46] Other Important Information - The company has renewed its deal with TikTok, resulting in improved deal economics [9] - A significant increase in the joint venture capacity with Bain from $1.2 billion to approximately $1.65 billion was announced [20][68] Q&A Session Summary Question: Can you expand on your AI philosophy and the financial impact of AI deals? - Management emphasized that AI initiatives align with their three strategic priorities and are designed to protect artists while creating value [31][34] - The financial impact from AI partnerships is expected to be material, with revenue sharing based on consumption [40][41] Question: What is the outlook for paid streaming growth and DSP deals? - Management noted that they are seeing volume-led subscription growth evolve into value-led growth, with opportunities for super premium tiers [46][47] Question: How is the company driving consistent market share growth? - Management attributed growth to a broad-based strategy, including restructuring and reinvestment in technology and A&R [52][53] Question: Can you provide details on margin targets and cash flow conversion? - Management indicated that margin expansion is driven by cost savings, high-margin streaming growth, and AI revenue, with a target of mid- to high-20s percentage margins [74][75]

FISCAL Q1 2026 Earnings Snapshot © Warner Music Group 2026 Confidential 1 Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures. We provide reconciliations to these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings press release, which can be found on our website at investors.wmg.com. © Warner Music Group 2026 Confidential This presentation is a supplement to, and should be read in conjunction with, Warner Music Group's e ...

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Financial Performance - Reservoir Media reported revenue of $40.7 million for Q2 FY2025, representing a 6% increase year-over-year, with adjusted EBITDA rising 11% to $17.6 million [1][15] - Music Publishing revenue increased by 10% to $28.6 million, driven by acquisitions and price increases at streaming services, while Recorded Music revenue declined by 1% to $10.7 million [15][18] - Total costs decreased by 5% compared to the prior year, with a notable 20% reduction in administration expenses [15] Strategic Developments - The company signed significant deals with high-profile artists, including Snoop Dogg and k.d. lang, enhancing its talent roster [5][6][28] - Reservoir acquired publishing rights to the catalog of late songwriter Billy Strange, further diversifying its portfolio [7] - The company is focused on maintaining a strong pipeline with over $1 billion in transactions under consideration, indicating robust growth potential [13][26] Market Position and Outlook - Reservoir's strategy includes investing in legendary and evergreen catalogs, which are expected to provide consistent revenue streams through sync placements [10][12] - The company is increasing its revenue guidance for FY2025 to a range of $150 million to $153 million, reflecting a growth of nearly 5% compared to the previous fiscal year [21] - The demand for sync licensing is primarily driven by advertising, with expectations for continued improvement in this area [40]

Core Insights - Reservoir Media reported strong financial results for Q3 FY2025, with total revenue of $42.3 million, reflecting a 19% year-over-year increase driven by growth in both music publishing and recorded music revenues [1][11][12] Financial Performance - Total revenue increased by 19% year-over-year, with music publishing revenue up 16% and recorded music revenue up 20% [1][12] - Adjusted EBITDA reached $17.3 million, a 26% improvement from the previous year [5][12] - Net income for the quarter was approximately $5.3 million, compared to a net loss of $2.9 million in Q3 FY2024 [13][14] - Earnings per share for the quarter was $0.08, compared to a loss of $0.05 in the same quarter last year [14] Revenue Drivers - The growth in music publishing revenue was primarily driven by price increases at multiple music streaming services and the acquisition of new catalogs [14][15] - Recorded music revenue growth was supported by a royalty recovery related to underreported usage from a specific music catalog [12][15] Strategic Initiatives - The company has deployed over $70 million in catalog acquisitions year-to-date, including notable talents like Snoop Dogg and k.d. lang [6][18] - Reservoir's strategy includes focusing on off-market deals facilitated by extensive industry relationships, which have been key to successful M&A execution [5][21] Market Position - Reservoir achieved the sixth largest market share of top radio airplay and the eighth largest share of the Billboard Hot 100 [10] - The company celebrated six Grammy wins across its roster, highlighting its strong presence in the music industry [10][11] Future Outlook - The company raised its full-year revenue guidance from $150 million to a new range of $155 million to $158 million, indicating an expected growth of 8% compared to FY2024 [17] - Adjusted EBITDA guidance was also increased to a range of $61.5 million to $64.5 million, signaling growth of over 13% year-over-year [17][18]

Core Insights - Lunar Records has launched Lunar Records Fund 1, a tokenized real-world asset fund established in January 2026 [1] - The company is a joint venture between Melody Trust, LLC and the SI Blue Foundation, founded in 2023 [1] - The music catalog of Lunar Records gained significant recognition in major publications such as Billboard Magazine and Rolling Stone [1] Company Overview - Lunar Records is part of the Lunarprise Museum Mission, which aims to archive cultural artifacts [1] - The company’s music, along with other projects, was included in a time capsule that landed on the moon on February 22, 2024 [1] - This event marked the first lunar landing for the USA and NASA since 1972, highlighting the historical significance of the project [1] Industry Context - The establishment of a tokenized asset fund indicates a growing trend in the investment industry towards digital and tokenized assets [1] - The collaboration between entertainment and space exploration sectors reflects innovative approaches to cultural preservation and investment opportunities [1]

Financial Data and Key Metrics Changes - Sales of continuing operations in FY 2025 Q3 increased by 1% year-on-year to JPY 3,713.7 billion, while operating income rose by 22% to JPY 515 billion, both record highs for the third quarter [3] - Net income increased by 11% to JPY 377.3 billion [3] - The full-year sales forecast was upwardly revised by 3% to JPY 12,300 billion, operating income forecast by 8% to JPY 1,540 billion, and net income forecast by 8% to JPY 1,130 billion [3] Business Segment Data and Key Metrics Changes - G&NS segment sales decreased by 4% year-on-year, but operating income increased by 19% due to favorable foreign exchange rates and increased sales in network services and first-party software [4] - Music segment sales increased by 13% year-on-year, with operating income rising by 9%, reaching a record high for the third quarter [9] - I&SS segment sales increased by 21% year-on-year, and operating income increased by 35%, both record highs for the segment [15][16] Market Data and Key Metrics Changes - User engagement for PlayStation increased, with monthly active users rising by 2% to a record high of 132 million accounts [5] - The global interchangeable lens camera market demand remained strong year-on-year, particularly in Asia, despite a decline in sales in China [14] Company Strategy and Development Direction - The company plans to enhance its music, video, and event business by leveraging Peanuts IP, aiming for long-term growth [12][13] - A strategic partnership with TCL aims to strengthen the home entertainment business through a joint venture, focusing on optimizing management and leveraging both companies' strengths [15][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain business environment but expressed confidence in the company's ability to manage and produce results as the fiscal year-end approaches [18] - Concerns regarding memory supply and pricing were noted, but management believes the impact on high-end products will be limited [17][28] Other Important Information - The company increased its share repurchase facility from JPY 100 billion to JPY 150 billion, reflecting confidence in its business fundamentals [18][69] - The introduction of a lower-priced PlayStation model in Japan aims to enhance market presence and is expected to have a mid to long-term positive impact [48] Q&A Session Summary Question: About the game "Marathon" and its strategic significance - Management explained that user feedback led to modifications before the release, emphasizing the importance of live service games for recurring revenue [22][24] Question: Concerns about stock price performance - Management acknowledged market concerns regarding memory supply and the entertainment sector's performance but emphasized a focus on improving fundamentals and profitability [26][28] Question: ET&S structural reform and home entertainment partnership - Management clarified that the partnership with TCL aims to optimize the home entertainment business, including TV and audio [31][32] Question: Impact of rising memory prices on PS5 - Management indicated that while there may be some impact on new hardware sales due to cost increases, the established software and network service revenue will continue to contribute significantly [34][36] Question: Music streaming revenue growth prospects - Management expects continued growth in the music business driven by increasing average revenue per user and user numbers [39] Question: Generative AI's impact on game development - Management views generative AI as a tool that can enhance creativity in game development, emphasizing the importance of integrating AI with artistic sensitivity [80]

Financial Data and Key Metrics Changes - Sales of continuing operations in FY 2025 Q3 increased by 1% year-on-year to JPY 3,713.7 billion, while operating income rose by 22% to JPY 515 billion, both record highs for the third quarter [3] - Net income increased by 11% to JPY 377.3 billion [3] - Full-year sales forecast was upwardly revised by 3% to JPY 12,300 billion, operating income forecast increased by 8% to JPY 1,540 billion, and net income forecast also increased by 8% to JPY 1,130 billion [3] Business Segment Data and Key Metrics Changes - **G&NS Segment**: FY 2025 Q3 sales decreased by 4% year-on-year, but operating income increased by 19% due to favorable foreign exchange rates and increased sales in network services and first-party software [4] - **Music Segment**: Sales increased by 13% year-on-year, with operating income rising by 9%, reaching a record high for the third quarter [9] - **Pictures Segment**: Sales decreased by 11% year-on-year, and operating income decreased by 9% due to the absence of blockbuster films compared to the previous year [11] - **ET&S Segment**: Sales decreased by 7% year-on-year, and operating income decreased by 23% due to lower sales, partially offset by improved operating expenses [13] - **I&SS Segment**: Sales increased by 21% year-on-year, and operating income increased by 35%, both record highs for the segment [15] Market Data and Key Metrics Changes - User engagement for PlayStation increased, with monthly active users rising by 2% to a record high of 132 million accounts [5] - Total playtime for the quarter increased by 0.4% year-on-year [5] - The global interchangeable lens camera market demand remained strong year-on-year, particularly in Asia [14] Company Strategy and Development Direction - The company aims to enhance its gaming and studio business by releasing new titles and leveraging successful franchises [8][10] - A strategic partnership with TCL was established to strengthen the home entertainment business through a joint venture [15][31] - The company plans to optimize its business portfolio and improve profitability while managing the impact of rising memory costs [17][69] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain business environment but expressed confidence in the company's ability to manage and produce results [18] - Concerns regarding memory supply and the impact of AI on the entertainment industry were discussed, with a focus on leveraging AI for content creation [26][53][78] Other Important Information - The company increased its share repurchase facility from JPY 100 billion to JPY 150 billion, reflecting confidence in its earnings and cash flow [18][68] - The acquisition of an additional equity interest in Peanuts Holdings was highlighted as a strategic initiative to enhance brand value [12] Q&A Session Summary Question: About the game "Marathon" and its strategic significance - Management explained that user feedback led to modifications before the release, emphasizing the importance of live service games for recurring revenue [22][24] Question: Concerns about stock price performance - Management acknowledged market concerns regarding memory supply and the entertainment sector's performance, emphasizing a focus on improving fundamentals and profitability [25][27] Question: ET&S structural reform and home entertainment partnership - Management clarified that the partnership with TCL aims to optimize the home entertainment business, with details still being discussed [30][32] Question: Impact of rising memory prices on PS5 - Management indicated that while there may be some impact on hardware sales, the established software and network service revenue will continue to contribute significantly [33][35] Question: Music streaming revenue growth prospects - Management expressed confidence in continued growth in the music business, driven by increasing average revenue per user and user numbers [39] Question: Generative AI's impact on game development - Management viewed AI as a tool that can enhance creativity in game development, emphasizing the importance of integrating AI with artistic sensitivity [77][78]

Financial Data and Key Metrics Changes - Sales of continuing operations in FY 2025 Q3 increased by 1% year-on-year to JPY 3,713.7 billion, while operating income rose by 22% to JPY 515 billion, both record highs for the third quarter [2] - Net income increased by 11% to JPY 377.3 billion [2] - Full-year sales forecast was upwardly revised by 3% to JPY 12,300 billion, operating income forecast increased by 8% to JPY 1,540 billion, and net income forecast also increased by 8% to JPY 1,130 billion [2] Business Segment Data and Key Metrics Changes - G&NS segment sales decreased by 4% year-on-year, but operating income increased by 19% due to favorable foreign exchange rates and increased sales in network services and first-party software [3] - Music segment sales increased by 13% year-on-year, with operating income rising by 9%, driven by live events and streaming revenue [6][7] - ET&S segment sales decreased by 7% year-on-year, and operating income decreased by 23% due to lower sales [12] - I&SS segment sales increased by 21% year-on-year, and operating income increased by 35%, both record highs for the segment [14][15] Market Data and Key Metrics Changes - Monthly active users across all PlayStation platforms increased by 2% year-on-year to a record high of 132 million accounts [4] - Total playtime for the quarter increased by 0.4% year-on-year [4] - The global interchangeable lens camera market demand remained strong year-on-year, particularly in Asia [13] Company Strategy and Development Direction - The company plans to enhance its music, video, and event business by leveraging Peanuts IP, aiming for long-term growth [11][12] - A strategic partnership with TCL aims to strengthen the home entertainment business through a joint venture [14][26] - The company intends to prioritize monetization of its existing install base and expand software and network service revenue in the gaming segment [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain business environment but expressed confidence in achieving results as the fiscal year-end approaches [17] - Concerns regarding memory supply and pricing were noted, with management indicating a focus on improving profitability and optimizing the business portfolio [23][45] - The company remains optimistic about the upcoming software lineup in the gaming and Sony Pictures segments [45] Other Important Information - The company increased its share repurchase facility from JPY 100 billion to JPY 150 billion, reflecting confidence in its business fundamentals [17][52] - The acquisition of an additional equity interest in Peanuts Holdings is expected to contribute approximately JPY 45 billion to operating income [7] Q&A Session Summary Question: About the game "Marathon" and its strategic significance - Management explained that user feedback led to modifications before the release, emphasizing the importance of live service games for recurring revenue [20] Question: Concerns about stock price performance - Management acknowledged market concerns regarding memory supply and the overall entertainment sector but emphasized a focus on improving business fundamentals [23] Question: About the strategic partnership with TCL - Management clarified that the partnership aims to optimize the home entertainment business, including TV and home audio [26] Question: Impact of rising memory prices on PS5 - Management indicated that while there may be some impact on hardware sales, the focus will remain on software and network services, which are expected to continue contributing significantly [28] Question: Music streaming revenue growth prospects - Management expressed confidence in mid to long-term growth in the music business, driven by increasing average revenue per user and user numbers [31] Question: Generative AI's impact on game development - Management views generative AI as a tool that can enhance creativity in game development, emphasizing the need for integration with human sensitivity [61]