Warner Music (WMG) investor relations material

Executive summary

• Total revenue grew 7%-9% year-over-year, driven by strong streaming, catalog performance, and market share gains, especially in the US.

• Adjusted OIBDA increased 16%-18% year-over-year, with margin expanding to 22.1%, up 170-180 bps.

• Strategic restructuring plan targets $300M in annualized cost savings by fiscal 2027, supporting margin expansion and reinvestment.

• Announced a $1.2B joint venture with Bain Capital to accelerate catalog acquisitions and expand M&A activity.

• Entered a $500M senior secured credit facility, expandable to $700M, for music catalog acquisitions, with strict covenants and bankruptcy-remote structure.

Financial highlights

• Q3 total revenue reached $1.689B, up from $1.578B, with adjusted OIBDA at $373M.

• Operating cash flow fell to $46M from $188M; free cash flow dropped to $7M from $160M, mainly due to higher A&R and tech investments.

• Recorded Music revenue up 6%-8%; streaming revenue up 3%-4% (8.5% adjusted); Music Publishing revenue up 9%-10%, with streaming up 20%.

• Adjusted OIBDA margin at 22.1%, up from 20.3%-20.4% year-over-year.

• Net loss of $16M compared to net income of $141M prior year, impacted by restructuring and FX losses.

Outlook and guidance

• Majority of restructuring savings expected to be accretive to Adjusted OIBDA by fiscal 2027.

• Margin expansion of 150-200 bps expected in fiscal 2026 from cost savings program.

• Targeting 50%-60% operating cash flow conversion over a multiyear period.

• Confident in long-term growth, supported by industry resilience, new investments, and M&A activity.