Warner Music Group (WMG) investor relations material

Executive summary

• Revenue grew 17% year-over-year to $1.73 billion, with double-digit gains in both Recorded Music and Music Publishing, driven by strong digital and streaming growth and market share gains.

• Net income surged to $181 million from $36 million in the prior-year quarter, reflecting higher operating income and improved margins.

• Adjusted OIBDA increased 31% to $397 million, with margin expansion to 22.9% from 20% year-over-year.

• Strategic focus on market share growth, value creation, efficiency, and leveraging AI across all areas, supported by innovative partnerships and acquisitions.

• Announced new partnerships and exclusive content deals, including with Paramount Pictures and Netflix, and expanded publishing operations in India.

Financial highlights

• Total revenue for the quarter was $1.73 billion (+17% year-over-year), with net income at $181 million and operating income up 57% to $264 million.

• Adjusted OIBDA margin improved to 22.9%, and Adjusted EPS rose 38% to $0.44.

• Operating cash flow grew 83% year-over-year, with free cash flow up 200% to $99 million.

• Cash balance was $741 million, total debt $4.72 billion, and net debt $3.98 billion as of March 31, 2026.

• Dividends paid totaled $100 million in the quarter ($0.19 per share), with $200 million paid year-to-date.

Outlook and guidance

• Targets high single-digit total revenue growth, double-digit adjusted OIBDA and EPS growth, and 50%-60% operating cash flow conversion.

• Expects to achieve the high end of the 150-200 basis points margin expansion target for fiscal 2026.

• The 2025 Restructuring Plan aims for $300 million in annualized run-rate cost savings by fiscal 2027, with most savings accretive to Adjusted OIBDA.

• Anticipates material revenue from AI licensing deals starting in fiscal 2027.

• Continued focus on innovative partnerships and expansion into new markets, including direct operations in India.