Financial Data and Key Metrics Changes - Total revenue increased by 7%, with adjusted OIBDA rising by 16% and a margin of 22.1%, reflecting a 170 basis point increase year-over-year [27] - Adjusted for notable items, total revenue grew by 8% and adjusted OIBDA increased by 17%, maintaining a margin of 21.8% [27] - Operating cash flow decreased to $46 million from $188 million in the prior year quarter, with free cash flow dropping to $7 million from $160 million [30][31] Business Line Data and Key Metrics Changes - Recorded music revenue increased by 6% or 8% on an adjusted basis, driven by growth in streaming, licensing, and artist services [28] - Recorded music streaming revenue grew by 3%, with subscription growth at 4% and ad-supported decline at 2% [28] - Music publishing revenue increased by 9%, driven by growth across performance, mechanical, digital, and sync revenue [28] Market Data and Key Metrics Changes - Recorded music market share in the U.S. increased by roughly one percentage point year-over-year, indicating growth in key regions [6][29] - The company is seeing positive improvements globally across EMEA, APAC, and LatAm markets [29] Company Strategy and Development Direction - The company is focused on three strategic priorities: growing market share, increasing the value of music, and improving efficiency [5][11] - A $1.2 billion joint venture with Bain Capital was announced to accelerate M&A activity and expand catalog acquisitions [11][25] - A strategic reorganization plan was introduced to generate $300 million in cost savings, aimed at future-proofing the company and unlocking growth [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in charts and market share gains [5][33] - The outlook for 2026 and beyond is promising, with expectations for financial performance to reflect the success of artists and songwriters [33] - Management emphasized the importance of protecting artists' rights and adapting to the evolving landscape of AI in the music industry [12][13] Other Important Information - The company is committed to returning capital to shareholders, with a $100 million buyback authorization and a 6% increase in quarterly dividends [26] - The company has made significant investments in technology and infrastructure to enhance operational efficiency and artist support [17][18] Q&A Session Summary Question: Strategy changes and resource allocation - Management highlighted the importance of freeing up capital through reorganization to sustain future growth and emphasized the focus on high-potential markets [36][38] Question: Subscription streaming growth and cash conversion - Management expressed confidence in future streaming performance, citing healthy industry dynamics and the impact of recent DSP renewals [45][50][51] - Cash conversion remains a priority, with a target of 50% to 60% [47][48] Question: Success in breaking new stars and catalog acquisitions - Management attributed success to strong artist development and a skilled team, emphasizing the importance of global infrastructure [56][58] - The joint venture with Bain is seen as a critical component for accelerating catalog acquisitions [61][62] Question: Cost savings program and organizational changes - The cost savings program aims to create a balanced organization that drives growth while delivering savings [66][70] - Management is focused on investing in key markets and enhancing marketing tools to discover new talent [69][70] Question: Ad-supported streaming trends - Management noted growth in the core DSP ad business but acknowledged challenges in the short-form video content sector [78][82] Question: Super premium experience and interactive music - Management is in discussions with partners to evolve the super premium experience, recognizing the potential for interactivity in music [86][90] Question: Insights from gaming industry experience - Management highlighted the opportunity to offer more premium products and the importance of execution in capturing market potential [94][96]

Financial Data and Key Metrics Changes - Total revenue increased by 7%, with adjusted OIBDA rising by 16% and a margin of 22.1%, reflecting a 170 basis point increase year-over-year [28][30] - Adjusted for notable items, total revenue grew by 8% and adjusted OIBDA increased by 17% with a margin of 21.8%, also a 170 basis point increase year-over-year [28][30] - Operating cash flow decreased to $46 million from $188 million in the prior year quarter, with free cash flow dropping to $7 million from $160 million [31][32] Business Line Data and Key Metrics Changes - Recorded music revenue increased by 6% or 8% on an adjusted basis, driven by growth in streaming, licensing, and artist services [28][29] - Recorded music streaming revenue grew by 3%, with subscription growth at 4% and ad-supported decline at 2% [28][29] - Music publishing revenue increased by 9%, driven by growth across performance, mechanical, digital, and sync revenue [29] Market Data and Key Metrics Changes - Recorded music market share in the U.S. increased by approximately one percentage point year-over-year, according to Luminate data [7][30] - Positive improvements were noted globally across EMEA, APAC, and LatAm markets [30] Company Strategy and Development Direction - The company is focused on three strategic priorities: growing market share, increasing the value of music, and improving efficiency [6][13] - A $1.2 billion joint venture with Bain Capital was announced to enhance M&A activities and expand catalog acquisitions [13][25] - A strategic reorganization plan was introduced to generate $300 million in cost savings, aimed at future-proofing the company and unlocking growth [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance from artists and a healthy industry environment [33][34] - The company anticipates that financial performance will reflect the success of its artists and songwriters as it moves past tough comparables [33][34] - There is a commitment to revenue acceleration and margin expansion through cost savings and strategic investments [34] Other Important Information - The company is embracing AI to benefit artists and songwriters while also protecting their rights in the context of generative AI [14][15] - A new app, WMG Pulse, was launched to provide artists with insights into their streaming and audience data [42] Q&A Session Summary Question: Strategy changes and generative AI - Management highlighted the importance of reallocating resources for growth while also focusing on efficiency through a strategic reorganization [40][43] Question: Subscription streaming growth and future performance - Management expressed confidence in future performance, citing healthy industry dynamics and the impact of recent DSP renewals [53][55] Question: Success in breaking new stars and sustainability - Management attributed success to investments in artist development and a strong team, emphasizing the importance of global infrastructure and local expertise [59][61] Question: Cost savings program and organizational changes - The organization is designed to balance local expertise with global scale, focusing on key markets and driving cost savings [70][72] Question: Ad-supported streaming trends - Management noted growth in the core DSP ad business but acknowledged challenges in the short-form video content sector [82][83]

Financial Data and Key Metrics Changes - The company's revenue increased by 1% in Q2, with recorded music revenue growing by 1% and music publishing revenue growing by 3% [9][25] - Adjusted OIBDA decreased by 1%, with an adjusted OIBDA margin of 20.4%, a decrease of 50 basis points compared to the prior year quarter [9][25] - Operating cash flow increased to $69 million from a use of $31 million in the prior year quarter, primarily due to timing of working capital items [28] - Free cash flow increased to $33 million from a use of $57 million in the prior year quarter [29] Business Line Data and Key Metrics Changes - Subscription streaming revenue grew by 3%, while ad-supported streaming declined by 3% due to a soft overall ad environment [25][26] - Physical revenue increased by 2% due to strong releases in the U.S. and Japan, partially offset by the BMG roll-off [26] - Artist services and expanded rights revenue decreased by 6% due to lower concert promotion revenue, primarily in France [26] - Music publishing total revenue increased by 3%, with streaming revenue increasing by 2% [27] Market Data and Key Metrics Changes - Market share pressure was noted in China, contributing to the overall performance challenges [9] - The company has seen real progress in high-growth markets such as MENA, Nigeria, and India, where market share has meaningfully increased [13] Company Strategy and Development Direction - The company is focused on three strategic priorities: growing market share, growing the value of music, and increasing efficiency to free up capital for reinvestment [10][20] - The company is increasing its M&A activity to augment growth alongside organic strategies [16][21] - A new app, WMG Pulse, was launched to provide real-time insights for artists, reflecting the company's investment in technology [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a transition period in the industry and expressed optimism about the resilience of music as an art form [9][10] - The company expects challenges experienced in Q2 to persist for the remainder of the fiscal year, resulting in lower subscription streaming growth than previously expected [23] - Management emphasized the importance of protecting artists and songwriters, particularly in the context of AI developments [18][19] Other Important Information - The company announced plans to achieve over $300 million in annualized cost savings, with the majority being reinvested in music and technology [20] - The company welcomed a new CFO, Armin Zerza, who brings a strong track record from Activision Blizzard [7] Q&A Session Summary Question: What confidence can you give investors regarding Warner Music's growth goals? - Management highlighted a strategy focused on growing market share, value of music, and efficiency, with early signs of success in chart performance and market share growth [34][35] Question: Can you provide an update on subscription streaming growth expectations? - Management expects similar trends to Q2 for the remainder of the year, with challenges persisting [39] Question: What is the strategy for growing global market share, particularly in emerging markets? - Management noted success in markets like Mexico and Brazil and emphasized the importance of a new head of Asia to drive growth in China [44][45] Question: What changed regarding expectations for high single-digit subscription growth? - Management cited tough comparisons from the previous year, market pressure, a lighter release schedule, and weakness in China as contributing factors [52][53] Question: Can you elaborate on the investments in ANR and market share goals? - Management indicated a focus on capital allocation and a shift towards a repertoire lens for evaluating opportunities [67]

FISCAL Q2 2025 Earnings Snapshot © Warner Music Group 2025 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 2025 Confidential This presentation is a supplement to, and should be read in conjunction with, Warner Music Group's e ...