Q4 2025 Warner Music Group Corp Earnings Call

November 20, 2025

Call is being recorded for replay purposes, and if you object you may disconnect at any time.

Now I would like to turn today's call over to your host Mr. Kareem Chin head of Investor Relations you may begin.

Speaker #7: How can you love me every day? I'm someone you've never met. How can we go back to being friends when we just shared a bed?

[Company Representative] (Warner Music Group): How can you look up at me and pretend I'm someone you never met? How can we go back to being friends when we just shared a bed? How can you look up at me and pretend I'm someone you never met?

How can you look up at me and pretend I'm someone you never met? How can we go back to being friends when we just shared a bed? How can you look up at me and pretend I'm someone you never met?

Good morning, everyone and welcome to Warner Music group's fiscal fourth quarter and full year earnings conference call.

Please note that our earnings press release earnings snapshot and Form 10-K are available on our website.

On today's call, we have our CEO, Robert Kinsell CFO <unk>, Joseph who will take you through our results and then we'll answer your questions.

Speaker #7: How can you love at me every day? I'm someone you never met.

Before our prepared remarks, I would like to refer you to the second slide in the earnings snapshot to remind you that this communication includes forward looking statements that reflect the current views of Warner music group about future events and financial performance.

To present certain non-GAAP results. During this conference call and in our earnings snapshot slides and have provided schedules reconciling. These results to our GAAP results in our earnings press release all of these materials are posted on our website.

Also please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted.

Speaker #1: Welcome to Warner Music Group's fourth-quarter earnings call for the period and fiscal year ended September 30, 2025. At the request of Warner Music Group, today's call is being recorded for replay purposes.

Robert Kyncl: Welcome to Warner Music Group's fourth quarter earnings call for the period and fiscal year ended 30 September 2025. At the request of Warner Music Group, today's call is being recorded for replay purposes, and if you object, you may disconnect at any time. Now, I would like to turn today's call over to your host, Mr. Kareem Chin, head of investor relations. You may begin.

Operator: Welcome to Warner Music Group's fourth quarter earnings call for the period and fiscal year ended 30 September 2025. At the request of Warner Music Group, today's call is being recorded for replay purposes, and if you object, you may disconnect at any time. Now, I would like to turn today's call over to your host, Mr. Kareem Chin, head of investor relations. You may begin.

All forward statements are made as of today and we disclaim any duty to update such statements or expectations beliefs and projections are expressed in good faith and.

Speaker #1: And if you object, you may disconnect at any time. Now, I would like to turn today's call over to your host, Mr. Kareem Chin, Head of Investor Relations.

And we believe there is a reasonable basis for them. However.

However, there can be no assurance that management's expectations beliefs, and projections will result, or be achieved investors should not rely on forward looking statements because they are subject to a variety of risks uncertainties and other factors that can cause actual results that differ materially from our expectations.

Speaker #1: You may

Speaker #1: begin. Good morning, everyone,

Kareem Chin: Good morning, everyone, and welcome to Warner Music Group's fiscal fourth quarter and full year earnings conference call. Please note that our earnings press release, earnings snapshot, and Form 10-K are available on our website. On today's call, we have our CEO, Robert Kyncl, and our CFO, Armin Zerza, who will take you through our results, and then we'll answer your questions. Before our prepared remarks, I would like to refer you to the second slide of the earnings snapshot to remind you that this communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance. We plan to present certain non-GAAP results during this conference call and in our earnings snapshot slides, and have provided schedules reconciling these results to our GAAP results in our earnings press release. All of these materials are posted on our website.

Speaker #2: And welcome to Warner Music Group's fiscal fourth quarter and full-year earnings conference call. Please note that our earnings press release, earnings snapshot, and Form 10-K are available on our website.

Speaker #2: On today's call, we have our CEO, Robert Kyncl, and our CFO, Armin Zerza, who will take you through our results, and then we'll answer your questions.

Patients.

Information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in our filings with the SEC and with that I'll turn it over to Robert.

Speaker #2: Before our prepared remarks, I would like to refer you to the second slide of the earnings snapshot to remind you that this communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance.

Thanks, Karen and Hello, everyone.

Speaker #2: We plan to present certain non-GAAP results during this conference call and in our earnings snapshot slides and have provided schedules reconciling these results to our GAAP results in our earnings press release.

Hopped on the call early you just got a taste of the range of our artist roster.

From the massive breakout track from summer to the latest chart toppers from Cardi B 21 pilots.

Speaker #2: All of these materials are posted on our website. Also, please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted.

So the research on Google <unk>, 1998, Iris, which currently sits in the global top 15 on Spotify.

Kareem Chin: Also, please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted. All forward statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that can cause actual results that differ materially from our expectations. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our filings with the SEC. With that, I'll turn it over to Robert.

Also, please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted. All forward statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that can cause actual results that differ materially from our expectations. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our filings with the SEC. With that, I'll turn it over to Robert.

It's an incredibly exciting time to be at Warner Music group.

Speaker #2: All forward statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them.

Against the backdrop of a rapidly changing landscape, we've improved our market share and deliver profitable growth all while realigning our company to capitalize on the tremendous set of opportunities we have ahead.

Speaker #2: However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that can cause actual results that differ materially from our expectations.

Our growth plan continues to bear fruit and we've seen steady global market share gains over the past year.

In the United States were up <unk> six percentage points over the prior year quarter. According to eliminate.

Globally, our share of the Spotify top 200 has jumped by around six percentage points versus fiscal 2024 and for the entire quarter. We had the number two market share.

Speaker #2: Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our filings with the SEC.

Importantly, we are carrying this momentum into fiscal 'twenty six as we continue to execute on our strategy.

Speaker #2: And with that, I'll turn it over to.

Speaker #2: Robert. Thanks, Kareem, and

I'll dig into this in more depth, but first let's cover our Q4 highlights.

Robert Kyncl: Thanks, Kareem, and hello, everyone. If you hopped on the call early, you just got a taste of the range of our artist roster. From the massive breakout track from Samba to the latest chart toppers from Cardi B and Twenty One Pilots, to the resurgent Goo Goo Dolls 1998 hit Iris, which currently sits in the global top 15 on Spotify, it's an incredibly exciting time to be at Warner Music Group. Against the backdrop of a rapidly changing landscape, we've improved our market share and delivered profitable growth, all while realigning our company to capitalize on the tremendous set of opportunities we have ahead. Our growth plan continues to bear fruit, and we've seen steady global market share gains over the past year. In the United States, we're up 0.6% over the prior year quarter, according to Luminate.

Speaker #3: hello, everyone. If you hopped on the call early, you just got a taste of the range of our artist roster. From the massive breakout track from "Somber" to the latest chart-toppers from Cardi B and "21 Pilots," to the resurgent "Googoo Dolls 1998" hit "Iris," which currently sits in the Global Top 15 on Spotify.

I am pleased to say that we've seen acceleration on the top and bottom lines.

Driven by impressive performance across the company.

Total revenue grew 13% and on an adjusted basis recorded music subscription streaming increased eight 4%.

These results prove that our strategy is working.

Speaker #3: It's an incredibly exciting time to be at Warner Music Group. Against the backdrop of a rapidly changing landscape, we've improved our market share and delivered profitable growth, all while realigning our company to capitalize on the tremendous set of opportunities we have ahead.

Let me paint a picture from just a year ago.

Both the industry and W. M G. We're in a much different place.

A year ago, <unk> was facing market share pressure.

Today, we are laser focused our resources and investment on the highest return areas of our core music business.

Speaker #3: Our growth plan continues to bear fruit and we've seen steady global market share gains over the past year. In the United States, we're up 0.6 percentage points over the prior year quarter, according to Luminate, globally, our share of the Spotify top 200 has jumped by around 6 percentage points versus fiscal 2024.

This has led to market share gains that have translated into strong measurable improvement in our financial performance.

Robert Kyncl: Globally, our share of the Spotify top 200 has jumped by around 6 percentage points versus fiscal 2024, and for the entire quarter, we had the number two market share. Importantly, we're carrying this momentum into fiscal 2026 as we continue to execute on our strategy. I'll dig into this in more depth, but first, let's cover our Q4 highlights. I'm pleased to say that we've seen acceleration on the top and bottom lines, driven by impressive performance across the company. Total revenue grew 13%, and on an adjusted basis, recorded music subscription streaming increased 8.4%. These results prove that our strategy is working. Let me paint you a picture from just a year ago when both the industry and WMG were in a much different place. A year ago, WMG was facing market share pressure.

Globally, our share of the Spotify top 200 has jumped by around 6 percentage points versus fiscal 2024, and for the entire quarter, we had the number two market share. Importantly, we're carrying this momentum into fiscal 2026 as we continue to execute on our strategy. I'll dig into this in more depth, but first, let's cover our Q4 highlights. I'm pleased to say that we've seen acceleration on the top and bottom lines, driven by impressive performance across the company. Total revenue grew 13%, and on an adjusted basis, recorded music subscription streaming increased 8.4%. These results prove that our strategy is working. Let me paint you a picture from just a year ago when both the industry and WMG were in a much different place. A year ago, WMG was facing market share pressure.

A year ago, the music inductive us navigate on the transition from just volume driven streaming growth to growth that is driven by volume and wholesale price increases.

Speaker #3: And for the entire quarter, we had the number two market share. Importantly, we're carrying this momentum into fiscal '26 as we continue to execute on our strategy.

They are new agreements with key DSP partners.

Like music ever growing value and provide greater certainty around our economics.

Speaker #3: I'll dig into this in more depth, but first, let's cover our Q4 highlights. I'm pleased to say that we've seen acceleration on the top and bottom lines.

A year ago, our operational structure wasn't optimized to navigate a more globalized and digital environment.

Today, we have focused and simplified our organization to deliver greater intensity and impact.

Speaker #3: Driven by impressive performance across the company, total revenue grew 13%, and on an adjusted basis, recorded music subscription streaming increased 8.4%. These results prove that our strategy is working.

I am pleased with the progress that we've made and I'm truly grateful to our leadership team and our operators across the globe and our amazing artists and songwriters for pushing <unk> to new Heights.

Speaker #3: Let me paint you a picture from just a year ago. When both the industry and WMG were in much different places. A year ago, WMG was facing market share pressure.

All of these actions have better positioned us to execute quickly and effectively on the opportunities we see ahead.

To maximize the value we deliver to artists songwriters.

Speaker #3: Today, we've laser-focused our resources and investment on the highest return areas of our core music business. This has led to market share gains that have translated into strong, measurable improvement in our financial performance.

Robert Kyncl: Today, we've laser-focused our resources and investment on the highest return areas of our core music business. This has led to market share gains that have translated into strong, measurable improvement in our financial performance. A year ago, the music industry was navigating the transition from just volume-driven streaming growth to growth that is driven by volume and wholesale price increases. Today, our new agreements with key DSP partners better reflect music's ever-growing value, and provide greater certainty around our economics. A year ago, our operational structure wasn't optimized to navigate a more globalized and digital environment. Today, we've focused and simplified our organization to deliver greater intensity and impact. I'm pleased with the progress that we've made, and I'm truly grateful to our leadership team, our operators across the globe, and our amazing artists and songwriters for pushing WMG to new heights.

Today, we've laser-focused our resources and investment on the highest return areas of our core music business. This has led to market share gains that have translated into strong, measurable improvement in our financial performance. A year ago, the music industry was navigating the transition from just volume-driven streaming growth to growth that is driven by volume and wholesale price increases. Today, our new agreements with key DSP partners better reflect music's ever-growing value, and provide greater certainty around our economics. A year ago, our operational structure wasn't optimized to navigate a more globalized and digital environment. Today, we've focused and simplified our organization to deliver greater intensity and impact. I'm pleased with the progress that we've made, and I'm truly grateful to our leadership team, our operators across the globe, and our amazing artists and songwriters for pushing WMG to new heights.

<unk> and shareholders.

Let's turn to the impressive run overheads, we've been seeing with our new releases as well as our catalog successes.

On new releases in September alone, we had back to back number one albums in two of the worlds biggest music markets. Thanks to Carnaby and 21 pilots in the United States, and Ed Sheeran and <unk> in the U K.

Speaker #3: A year ago, the music industry was navigating the transition from just volume-driven streaming growth to growth that is driven by volume and wholesale price increases.

Speaker #3: Today, our new agreements with KBSP partners better reflect music's ever-growing value and provide greater certainty around our economics. A year ago, our operational structure wasn't optimized to navigate a more globalized and digital environment.

On the international front, we had number ones in China, India, Finland, Italy, and Spain and on Billboard's Latin Airplane chart.

And in a terrific vote of confidence one of our legendary Superstars Madonna has returned to where it all began for her Warner Records with a new album coming in 2026.

Speaker #3: Today, we focus and simplified our organization to deliver greater intensity and impact. I'm pleased with the progress that we've made, and I'm truly grateful to our leadership team and our operators across the globe and our amazing artists and songwriters for pushing WMG to new heights.

The performance of our global catalog division in Q4 showcased our ability to revitalize our timeless legacy, making good relevance to a range of new audiences are.

A major highlight was the release of Buckingham Nicks go long out of print 1973 album by Fleetwood Mac's TV mix and Lindsey Buckingham.

Speaker #3: All of these actions have better positioned us to execute quickly and effectively on the opportunities we see ahead, and to maximize the value we deliver to artists, songwriters, fans, and shareholders.

Robert Kyncl: All of these actions have better positioned us to execute quickly and effectively on the opportunities we see ahead, and to maximize the value we deliver to artists, songwriters, fans, and shareholders. Let's turn to the impressive run of hits we've been seeing with our new releases, as well as our catalog successes. On new releases, in September alone, we had back-to-back number one albums in two of the world's biggest music markets, thanks to Cardi B and Twenty One Pilots in the United States, and Ed Sheeran and Biffy Clyro in the UK. On the international front, we had number ones in China, India, Finland, Italy, and Spain, and on Billboard's Latin Airplay chart. In a terrific vote of confidence, one of our legendary superstars, Madonna, has returned to where it all began for her, Warner Records, with a new album coming in 2026.

All of these actions have better positioned us to execute quickly and effectively on the opportunities we see ahead, and to maximize the value we deliver to artists, songwriters, fans, and shareholders. Let's turn to the impressive run of hits we've been seeing with our new releases, as well as our catalog successes. On new releases, in September alone, we had back-to-back number one albums in two of the world's biggest music markets, thanks to Cardi B and Twenty One Pilots in the United States, and Ed Sheeran and Biffy Clyro in the UK. On the international front, we had number ones in China, India, Finland, Italy, and Spain, and on Billboard's Latin Airplay chart. In a terrific vote of confidence, one of our legendary superstars, Madonna, has returned to where it all began for her, Warner Records, with a new album coming in 2026.

Targeted marketing campaign capitalized on fan demand, sending it to number 11 on the main Billboard album chart and number six in the U K a remarkable achievement for an album more than a half a century old.

Speaker #3: Let's turn to the impressive run of hits we've been seeing with our new releases as well as our catalog successes. On new releases, in September alone, we had back-to-back number one albums in two of the world's biggest music markets, thanks to Cardi B and Twenty One Pilots in the United States and Ed Sheeran and Biffy Clyro in the UK.

Warner Chappell continued its resurgence with our song out as contributing to seven of eliminates midyear top 10, most streamed songs in the world and in the United States.

And multi Grammy winner, Amy Alan held the top spot on the Billboard Hot 100 songs that is chart for nine weeks in 2025.

Speaker #3: On the international front, we had number ones in China, India, Finland, Italy, and Spain, and on billboards, Latin airplane charts. And in a terrific vote of confidence, one of our legendary superstars, Madonna, has returned to where it all began for her, Warner Records, with a new album coming in 2026.

These Q4 success stories capped off a year of achievements.

During fiscal 'twenty five a recording artist set atop the Billboard Global 200 for 22 weeks.

That's 42% share of the number one spot on the chart.

With Atlantic Warner Records, and Warner Chappell harder than ever we're delivering success across geographies and genres.

Speaker #3: The performance of our global catalog division in Q4 showcased our ability to revitalize our timeless legacy, making it relevant to a range of new audiences.

Robert Kyncl: The performance of our global catalog division in Q4 showcased our ability to revitalize our timeless legacy, making it relevant to a range of new audiences. A major highlight was the release of Buckingham Nicks, the long out-of-print 1973 album by Fleetwood Mac's Stevie Nicks and Lindsey Buckingham. A targeted marketing campaign capitalized on fan demand, sending it to number 11 on the main Billboard album chart and number 6 in the UK, a remarkable achievement for an album more than a half a century old. Warner Chappell continued its resurgence, with our songwriters contributing to seven of Luminate's mid-year top 10 most streamed songs in the world and in the United States. Multi-Grammy winner Amy Allen held the top spot on the Billboard Hot 100 Songwriters chart for nine weeks in 2025. These Q4 success stories capped off a year of achievements.

The performance of our global catalog division in Q4 showcased our ability to revitalize our timeless legacy, making it relevant to a range of new audiences. A major highlight was the release of Buckingham Nicks, the long out-of-print 1973 album by Fleetwood Mac's Stevie Nicks and Lindsey Buckingham. A targeted marketing campaign capitalized on fan demand, sending it to number 11 on the main Billboard album chart and number 6 in the UK, a remarkable achievement for an album more than a half a century old. Warner Chappell continued its resurgence, with our songwriters contributing to seven of Luminate's mid-year top 10 most streamed songs in the world and in the United States. Multi-Grammy winner Amy Allen held the top spot on the Billboard Hot 100 Songwriters chart for nine weeks in 2025. These Q4 success stories capped off a year of achievements.

Next I'd like to cover our focus on increasing the value of music.

Speaker #3: A major highlight was the release of "Buckingham Nix," the long out-of-print 1973 album by Fleetwood Mac's TV Nix and Lindsey Buckingham. A targeted marketing campaign capitalized on fan demand, sending it to number 11 on the main Billboard album chart and number six in the UK.

Streaming growth Formula is made up of three components market share global subscriber growth and the wholesale price.

Against the backdrop of healthy subscriber growth and a market share improvement. We've also made progress on wholesale price since.

Since the beginning of 2025, we signed renewals with four of the largest DSD.

Speaker #3: A remarkable achievement for an album more than a half a century old. Warner Chappell continued its resurgence with our songwriters contributing to seven of Luminate's mid-year top 10 most streamed songs in the world and in the United States.

All of these deals have wholesale price increases providing certainty around economics, and sending up monetization models for the future use cases.

A critical component of ensuring we grow the value of music is addressing the promise as well as the potential risks of generative AI.

Speaker #3: And multi-Grammy winner Amy Allen held the top spot on the Billboard Hot 100 Songwriters chart for nine weeks in 2025. These Q4 success stories capped off a year of achievements.

First we need to acknowledge the reality that generate of AI technology has arrived and it is not going away. So.

So we need to be proactive and lean into the future.

Speaker #3: During fiscal '25, our recording artists set it up the Billboard Global 200 for 22 weeks. That's 42% share of the number one spot on the chart.

Robert Kyncl: During fiscal 2025, our recording artist set atop the Billboard Global 200 for 22 weeks. That's a 42% share of the number one spot on the chart. With Atlantic, Warner Records, and Warner Chappell hotter than ever, we're delivering success across geographies and genres. Next, I'd like to cover our focus on increasing the value of music. Streaming's growth formula is made up of three components: market share, global subscriber growth, and wholesale price. Against the backdrop of healthy subscriber growth and a market share improvement, we've also made progress on wholesale price. Since the beginning of 2025, we've signed renewals with four of the largest DSPs. All of these deals have wholesale price increases, providing certainty around economics and setting up monetization models for the future use cases.

During fiscal 2025, our recording artist set atop the Billboard Global 200 for 22 weeks. That's a 42% share of the number one spot on the chart. With Atlantic, Warner Records, and Warner Chappell hotter than ever, we're delivering success across geographies and genres. Next, I'd like to cover our focus on increasing the value of music. Streaming's growth formula is made up of three components: market share, global subscriber growth, and wholesale price. Against the backdrop of healthy subscriber growth and a market share improvement, we've also made progress on wholesale price. Since the beginning of 2025, we've signed renewals with four of the largest DSPs. All of these deals have wholesale price increases, providing certainty around economics and setting up monetization models for the future use cases.

The music industry is no stranger to disruption.

From the invention of the photograph to the Nextera to the rise of the data streaming ecosystem. The introduction of new technologies over many decades as opposed both challenges and opportunities.

Speaker #3: With Atlantic, Warner Records, and Warner Chappell hotter than ever, we're delivering success across geographies and genres. Next, I'd like to cover our focus on increasing the value of music.

AI represents another defining moment and.

And as always our focus remains on protecting the rights of our audits and strong others, while simultaneously growing new revenue streams on their behalf.

Speaker #3: Streaming's growth formula is made up of three components: market share, global subscriber growth, and wholesale price. Against the backdrop of healthy subscriber growth and a market share improvement, we've also made progress on the wholesale price.

With this in mind, we've developed a set of principles that will govern how we engage with AI platforms. We.

We will only make agreements with partners, who commit to licensed models, while securing economic terms that properly reflect the value of music.

Speaker #3: Since the beginning of 2025, we've signed renewals with four of the largest DSPs. All of these deals have wholesale price increases, providing certainty around economics and setting up monetization models for the future use cases.

Crucially, our artists and songwriters will have a choice to opt in to any use of their name image likeness or voice in new AI generated salts we.

We believe that the combined power of our music with innovative technology will drive greater engagement and interactivity for fans and will result in significant incremental revenue overtime.

Speaker #3: A critical component of ensuring we grow the value of music is addressing the promise, as well as the potential risks, of generative AI. First, we need to acknowledge the reality that generative AI technology has arrived, and it is not going away.

Robert Kyncl: A critical component of ensuring we grow the value of music is addressing the promise, as well as the potential risks, of generative AI. First, we need to acknowledge the reality that generative AI technology has arrived, and it is not going away. We need to be proactive and lean into the future. The music industry is no stranger to disruption. From the invention of the phonograph, to the Napster era, to the rise of today's streaming ecosystem, the introduction of new technologies over many decades has posed both challenges and opportunities. AI represents another defining moment, and as always, our focus remains on protecting the rights of our artists and songwriters, while simultaneously growing new revenue streams on their behalf. With this in mind, we've developed a set of principles that will govern how we engage with AI platforms.

A critical component of ensuring we grow the value of music is addressing the promise, as well as the potential risks, of generative AI. First, we need to acknowledge the reality that generative AI technology has arrived, and it is not going away. We need to be proactive and lean into the future. The music industry is no stranger to disruption. From the invention of the phonograph, to the Napster era, to the rise of today's streaming ecosystem, the introduction of new technologies over many decades has posed both challenges and opportunities. AI represents another defining moment, and as always, our focus remains on protecting the rights of our artists and songwriters, while simultaneously growing new revenue streams on their behalf. With this in mind, we've developed a set of principles that will govern how we engage with AI platforms.

I'm pleased to say that we've already done deals with partners like <unk> stability AI and clay.

Speaker #3: So we need to be proactive and lean into the future. The music industry is no stranger to disruption. From the invention of the phonograph to the Napster era, to the rise of today's streaming ecosystem, the introduction of new technologies over many decades has posed both challenges and opportunities.

That are consistent with these principles that I just outlined.

Our ability to signed three deals with three new companies in quick succession highlights the attractiveness of the music business and the opportunity to create value through new technology.

These agreements enable us to get ahead of the game, ensuring that our artists and songwriters participate fairly in.

Speaker #3: AI represents another defining moment and, as always, our focus remains on protecting the rights of our artists and songwriters while simultaneously growing new revenue streams on their behalf.

In the AI Revolution.

As I mentioned earlier, we've taken major steps to optimize our organization to drive efficiency and effectiveness, all while re accelerating growth and gaining market share.

Speaker #3: With this in mind, we've developed a set of principles that will govern how we engage with AI platforms. We will only make agreements with partners who commit to licensed models, while securing economic terms that properly reflect the value of music.

Robert Kyncl: We will only make agreements with partners who commit to licensed models while securing economic terms that properly reflect the value of music. Crucially, our artists and songwriters will have a choice to opt in to any use of their name, image, likeness, or voice in new AI-generated songs. We believe that the combined power of our music with innovative technology will drive greater engagement and interactivity for fans, and will result in significant incremental revenue over time. I'm pleased to say that we've already done deals with partners like Udio, Stability AI, and Klay that are consistent with these principles that I just outlined. Our ability to sign three deals with three new companies in quick succession highlights the attractiveness of the music business, and the opportunity to create value through new technology.

We will only make agreements with partners who commit to licensed models while securing economic terms that properly reflect the value of music. Crucially, our artists and songwriters will have a choice to opt in to any use of their name, image, likeness, or voice in new AI-generated songs. We believe that the combined power of our music with innovative technology will drive greater engagement and interactivity for fans, and will result in significant incremental revenue over time. I'm pleased to say that we've already done deals with partners like Udio, Stability AI, and Klay that are consistent with these principles that I just outlined. Our ability to sign three deals with three new companies in quick succession highlights the attractiveness of the music business, and the opportunity to create value through new technology.

Among our recent changes are some moves designed to foster closer collaboration.

We are directly aligned Atlantic and Warner Records in the UK with our counterparts in the U S, creating a more seamless trans Atlantic approach to breaking artist globally.

Speaker #3: Crucially, our artists and songwriters will have a choice to opt in to any use of their name, image, likeness, or voice in new AI-generated songs.

In Italy, we've organized our operations into two frontline labels Atlantic and Warner Records.

Speaker #3: We believe that the combined power of our music with innovative technology will drive greater engagement and interactivity for fans and will result in significant incremental revenue over time.

Mirroring the label structure in the U S and the UK.

We are also unifies, our Australasia and South East Asia businesses to create bigger opportunities in this region.

Speaker #3: I'm pleased to say that we've already done deals with partners like Udio, Stability AI, and Clay, that are consistent with these principles that I just outlined.

Additionally, we streamline operations and strengthen the impact for artists and Central Europe.

Benelux with Germany, Switzerland, and Austria.

Speaker #3: Our ability to sign three deals with three new companies in quick succession highlights the attractiveness of the music business and the opportunity to create value through new technology.

On the Tech front, we've continued to modernize our infrastructure, including strengthening our global digital supply chain to position the company for further scale and growth.

Speaker #3: These agreements enable us to get ahead of the game ensuring that our artists and songwriters participate fairly, in the AI revolution. As I mentioned earlier, we've taken major steps to optimize our organization to drive efficiency and effectiveness, all while re-accelerating growth and gaining market share.

Robert Kyncl: These agreements enable us to get ahead of the game, ensuring that our artists and songwriters participate fairly in the AI revolution. As I mentioned earlier, we've taken major steps to optimize our organization to drive efficiency and effectiveness, all while re-accelerating growth and gaining market share. Among our recent changes are some moves designed to foster closer collaboration. We've directly aligned Atlantic and Warner Records in the UK with their counterparts in the US, creating a more seamless transatlantic approach to breaking artists globally. In Italy, we've organized our operations into two frontline labels, Atlantic and Warner Records, mirroring the label structure in the US and the UK. We've also unified our Australasia and Southeast Asia businesses to create bigger opportunities in this region. Additionally, we streamline operations and strengthen the impact for artists in Central Europe by merging Benelux with Germany, Switzerland, and Austria.

These agreements enable us to get ahead of the game, ensuring that our artists and songwriters participate fairly in the AI revolution. As I mentioned earlier, we've taken major steps to optimize our organization to drive efficiency and effectiveness, all while re-accelerating growth and gaining market share. Among our recent changes are some moves designed to foster closer collaboration. We've directly aligned Atlantic and Warner Records in the UK with their counterparts in the US, creating a more seamless transatlantic approach to breaking artists globally. In Italy, we've organized our operations into two frontline labels, Atlantic and Warner Records, mirroring the label structure in the US and the UK. We've also unified our Australasia and Southeast Asia businesses to create bigger opportunities in this region. Additionally, we streamline operations and strengthen the impact for artists in Central Europe by merging Benelux with Germany, Switzerland, and Austria.

We've implemented tools to help artists and songwriters make faster smarter data driven decisions about their careers as well as tools for employees to be better informed and more effective.

Our emerging stars are building the Caddo loss of tomorrow laying the foundation for future stability.

Speaker #3: Among our recent changes are some moves designed to foster closer collaboration with directly aligned Atlantic and Warner Records in the UK with their counterparts in the US.

While our recent superstar releases have set us up well for 2026 and.

In Q1, we have highly anticipated new albums from Fred again, FK tweaks not for radio IR Nakamura and Robert plan.

Speaker #3: Creating a more seamless transatlantic approach to breaking artists globally. In Italy, we've organized our operations into two frontline labels, Atlantic and Warner Records, mirroring the label structure in the U.S. and the U.K.

Along with deluxe album additions from Ed Sheeran, Cardi, B and Pink Panthers.

We also have new singles from Charlie CX, Charlie Puth, Jesu, Hilary Duff <unk>, Alex one David get out Anthony swim and many many more.

Speaker #3: We've also unified our Australasia and Southeast Asia businesses to create bigger opportunities in this region. Additionally, we streamline operations and strengthen the impact for artists in Central Europe by merging Benelux with Germany, Switzerland, and Austria.

We're proud of the progress we've made in 2025 and I look forward to carrying this momentum into 2026 and beyond.

And now I'll pass it over to army.

Thank you Robert and good morning, everyone.

Speaker #3: On the tech front, we've continued to modernize our infrastructure including strengthening our global digital supply chain to position the company for further scale and growth.

Robert Kyncl: On the tech front, we've continued to modernize our infrastructure, including strengthening our global digital supply chain to position the company for further scale and growth. We've implemented tools to help artists and songwriters make faster, smarter, data-driven decisions about their careers, as well as tools for employees to be better informed and more effective. Our emerging stars are building the catalogs of tomorrow, laying the foundation for future stability, while our recent superstar releases have set us up well for 2026. In Q1, we have highly anticipated new albums from Fred again.., FKA twigs, Not4Radio, Aya Nakamura, and Robert Plant, along with deluxe album editions from Ed Sheeran, Cardi B, and PinkPantheress. We also have new singles from Charli XCX, Charlie Puth, Jisoo, Hilary Duff, Tiësto, Alex Warren, David Guetta, and Teddy Swims, and many, many more.

On the tech front, we've continued to modernize our infrastructure, including strengthening our global digital supply chain to position the company for further scale and growth. We've implemented tools to help artists and songwriters make faster, smarter, data-driven decisions about their careers, as well as tools for employees to be better informed and more effective. Our emerging stars are building the catalogs of tomorrow, laying the foundation for future stability, while our recent superstar releases have set us up well for 2026. In Q1, we have highly anticipated new albums from Fred again.., FKA twigs, Not4Radio, Aya Nakamura, and Robert Plant, along with deluxe album editions from Ed Sheeran, Cardi B, and PinkPantheress. We also have new singles from Charli XCX, Charlie Puth, Jisoo, Hilary Duff, Tiësto, Alex Warren, David Guetta, and Teddy Swims, and many, many more.

First I'd like to thank our teams around the world.

The tremendous work they've been doing to accelerate top and bottom line growth, while the organize our company for the future.

Speaker #3: We've implemented tools to help artists and songwriters make faster, smarter data-driven decisions about their to be better informed and more effective. Our emerging stars are building the catalogs of tomorrow, laying the foundation for future stability while our recent superstar releases have set us up well for 2026.

As Robert mentioned Q4 has been a quarter of acceleration as we delivered record high quarterly revenue as well as our highest year over year growth and even two years.

This reflects steady progress on market share with notable improvement in the second half of the fiscal year.

In quarter, four total revenue growth of 13% with double digit growth across three chronic music and music publishing.

Speaker #3: In Q1, we have highly anticipated new albums from Fred Again!, FKA Twigs, Not For Radio, Ayanakamura, and Robert Plant, along with deluxe album editions from Ed Sheeran, Cardi B, and Pink Panthers.

This was highlighted by sequential improvement in recorded music streaming and 64% growth in office services Ethnonymics slipped much campaigns for Oasis and biochemical Roland.

Speaker #3: We also have new singles from Charli XCX, Charlie Puth, Jisoo, Hilary Duff, Tiesto, Alex Warren, David Guetta and Tennis Twins, and many, many more.

These projects demonstrate our capabilities to support our artists and capitalize on the opportunities to grow revenue streams beyond call music more on that to come.

Speaker #3: We're proud of the progress we've made in 2025, and I look forward to carrying this momentum into 2026 and beyond. And now I'll pass it over to

Robert Kyncl: We're proud of the progress we've made in 2025, and I look forward to carrying this momentum into 2026 and beyond. I will pass it over to Armin.

We're proud of the progress we've made in 2025, and I look forward to carrying this momentum into 2026 and beyond. I will pass it over to Armin.

Recorded music subscription streaming grew eight 4%.

Speaker #3: Armin. Thank you, Robert, and

Armin Zerza: Thank you, Robert, and good morning, everyone. First, I'd like to thank our teams around the world for the tremendous work they've been doing to accelerate top and bottom-line growth while we organize our company for the future. As Robert mentioned, Q4 has been a quarter of acceleration as we delivered record-high quarterly revenue, as well as our highest year-over-year growth in nearly two years. This reflects steady progress on market share, with notable improvement in the second half of the fiscal year. In Q4, total revenue growth of 13% reflects double-digit growth across recorded music and music publishing. This was highlighted by a sequential improvement in recorded music streaming and 64% growth in artist services as WMX led merch campaigns for Oasis and My Chemical Romance. These projects demonstrate our capabilities to support our artists and capitalize on the opportunities to grow revenue streams beyond core music.

Speaker #2: Good morning, everyone. First, I'd like to thank our teams around the world for the tremendous work they've been doing to accelerate top- and bottom-line growth while we organize our company for the future.

Underpinned by global subscriber growth and supported by a strong market and chart share performance.

As a reminder, in calendar year 2026, we will start to see the impact of wholesale price increases from our new DSP deals, which should provide incremental tailwind.

Speaker #2: As Robert Kyncl mentioned, Q4 has been a quarter of acceleration, as we delivered record-high quarterly revenue as well as our highest year-over-year growth in nearly two years.

It's about streaming grew 3% on an adjusted basis driven by the performance of our music and the timing of certain DSD payments.

Speaker #2: This reflects steady progress on market share, with notable improvement in the second half of the fiscal year. In quarter four, total revenue growth of 13% reflects double-digit growth across recorded music and music publishing.

Music publishing grew 13%.

By double digit growth across performance mechanical and sink.

Adjusted OIBDA rose by 12%.

Our margins declined slightly due to revenue mix as a significant growth in <unk> service revenue carried a lower margin profile.

Speaker #2: This was highlighted by a sequential improvement in recorded music streaming and a 64% growth in artist services as WMX led merch campaigns for Oasis and My Chemical Romance.

For full year 2025, we delivered total revenue and adjusted OIBDA growth of 8% on an adjusted basis, reflecting our impressive recovery from the first half.

Speaker #2: These projects demonstrate our capabilities to support our artists and capitalize on the opportunities to grow revenue streams beyond core music. More on that to come.

This was spot that it by high single digit recorded music subscription streaming growth.

We also achieved operating cash flow conversion of 47% as we increased our in our investments.

Armin Zerza: More on that to come. Recorded music subscription streaming grew 8.4%, underpinned by global subscriber growth and supported by our strong market and chart-share performance. As a reminder, in calendar year 2026, we will start to see the impact of wholesale price increases from our new DSP deals, which should provide incremental tailwinds. Ad-supported streaming grew 3% on an adjusted basis, driven by the performance of our music and the timing of certain DSP payments. Music publishing grew 13%, driven by double-digit growth across performance, mechanical, and sync. Adjusted OIBDA rose by 12%, and our margins declined slightly due to revenue mix, as the significant growth in artist service revenue carries a lower margin profile. For full year 2025, we delivered total revenue and adjusted OIBDA growth of 8% on an adjusted basis, reflecting our impressive recovery from the first half.

More on that to come. Recorded music subscription streaming grew 8.4%, underpinned by global subscriber growth and supported by our strong market and chart-share performance. As a reminder, in calendar year 2026, we will start to see the impact of wholesale price increases from our new DSP deals, which should provide incremental tailwinds. Ad-supported streaming grew 3% on an adjusted basis, driven by the performance of our music and the timing of certain DSP payments. Music publishing grew 13%, driven by double-digit growth across performance, mechanical, and sync. Adjusted OIBDA rose by 12%, and our margins declined slightly due to revenue mix, as the significant growth in artist service revenue carries a lower margin profile. For full year 2025, we delivered total revenue and adjusted OIBDA growth of 8% on an adjusted basis, reflecting our impressive recovery from the first half.

Speaker #2: Recorded music subscription streaming grew 8.4%, underpinned by global subscriber growth and supported by a strong market and chart share performance. As a reminder, in calendar year 2026, we will start to see the impact of wholesale price increases from our new DSP deals.

We remain committed to delivering our target congressional range of 50% to 60% over the long term.

As of September 30, we had a cash balance of $532 million total debt of $4 4 billion and net debt of $3 8 million.

Speaker #2: We should provide incremental tailwinds. At Supported Streaming grew 3% on an adjusted basis driven by the performance of our music and the timing of certain DSP payments.

Weighted average cost of debt was four 1% and our nearest maturity date remains 2028.

With our strategy in place and a clear roadmap to deliver higher more consistent growth and drive shareholder value. We are extremely excited about the opportunities ahead.

Speaker #2: Music publishing grew 13%, driven by double-digit growth across performance, mechanical, and sync. Adjusted OIPTA rose by 12%, and our margins declined slightly due to revenue mix.

We operationalized in the strategic pillars that Robert laid out with several key priorities and initiatives, which are shared on our last earnings call and I'd like to provide an update on our progress.

Speaker #2: As a significant growth in artist service revenue carries a lower margin profile. For full year 2025, we delivered total revenue and adjusted OIPTA growth of 8% on an adjusted basis reflecting our impressive recovery from the first half.

First.

On investing into core music to accelerate growth and making progress across geographies and vintages recall, we prioritized investments in markets with the most attractive return profiles. As a result, we are now growing market share in every key region, including the U S. The largest music market.

Speaker #2: This was spotlighted by high single-digit recorded music subscription streaming growth. We also achieved operating cash flow conversion of 47% as we increased our A&R investment.

Armin Zerza: This was spotlighted by high single-digit recorded music subscription streaming growth. We also achieved operating cash flow conversion of 47% as we increased our A&R investments. We remain committed to delivering our target conversion range of 50% to 60% over the long term. As of 30 September 2024, we had a cash balance of $532 million, total debt of $4.4 billion, and net debt of $3.8 billion. Our weighted average cost of debt was 4.1%, and our nearest maturity date remains 2028. With our strategy in place and a clear roadmap to deliver higher, more consistent growth, and drive shareholder value, we are extremely excited about the opportunities ahead. We are operationalizing the strategic pillars that Robert laid out through several key priorities and initiatives, which I shared on our last earnings call, and I'd like to provide an update on our progress.

This was spotlighted by high single-digit recorded music subscription streaming growth. We also achieved operating cash flow conversion of 47% as we increased our A&R investments. We remain committed to delivering our target conversion range of 50% to 60% over the long term. As of 30 September 2024, we had a cash balance of $532 million, total debt of $4.4 billion, and net debt of $3.8 billion. Our weighted average cost of debt was 4.1%, and our nearest maturity date remains 2028. With our strategy in place and a clear roadmap to deliver higher, more consistent growth, and drive shareholder value, we are extremely excited about the opportunities ahead. We are operationalizing the strategic pillars that Robert laid out through several key priorities and initiatives, which I shared on our last earnings call, and I'd like to provide an update on our progress.

The world.

Additionally, our balanced approach to driving performance across vintages as a result in higher new release market share Thats Atlantic as far as the jump in global couple of sure.

Speaker #2: We remain committed to delivering our target conversion range of 50% to 60% over the long term. As of September 30, we had a cash balance of 532 million dollars, total debt of 4.4 billion dollars, and net debt of 3.8 billion dollars.

Robert mentioned this has improved our Spotify top 200 share by six percentage points.

In addition to these investments in our core we see tremendous opportunity to accelerate growth in distribution and direct to consumer.

Speaker #2: Our budget average cost of debt was 4.1%, and our nearest maturity date remains 2028. With our strategy in place and a clear roadmap to deliver higher, more consistent growth and drive shareholder value, we are extremely excited about the opportunities ahead.

We have a large and growing distribution business today and in our new leadership, we've been building or acquiring new capabilities to accelerate profitable growth in 2026.

We also see tremendous opportunities to capitalize on the passenger demand for all of the work for physical music and direct to consumer offerings areas adjacent to our Colombian business more or less in upcoming quarters.

Speaker #2: We are operationalizing the strategic pillars that Robert laid out through several key priorities and initiatives, which are shared on our last earnings call. And I'd like to provide an update on our progress.

Speaker #2: First, on investing in core music to accelerate growth, we're making progress across geographies and vintages. Recall, we prioritized investment in markets with the most attractive return profiles.

Armin Zerza: First, on investing into core music to accelerate growth, we're making progress across geographies and vintages. Recall, we prioritized investment in markets with the most attractive return profiles. As a result, we are now growing market share in every key region, including the US, the largest music market of the world. Additionally, our balanced approach to driving performance across vintages has resulted in higher new release market share, that's by Atlantic, as well as a jump in global catalog share. As Robert mentioned, this has improved our Spotify Top 200 share by 6 percentage points. In addition to these investments in our core, we see tremendous opportunities to accelerate growth in distribution and direct-to-consumer. We have a large and growing distribution business today, and under new leadership, we have been building or acquiring new capabilities to accelerate profitable growth in 2026.

First, on investing into core music to accelerate growth, we're making progress across geographies and vintages. Recall, we prioritized investment in markets with the most attractive return profiles. As a result, we are now growing market share in every key region, including the US, the largest music market of the world. Additionally, our balanced approach to driving performance across vintages has resulted in higher new release market share, that's by Atlantic, as well as a jump in global catalog share. As Robert mentioned, this has improved our Spotify Top 200 share by 6 percentage points. In addition to these investments in our core, we see tremendous opportunities to accelerate growth in distribution and direct-to-consumer. We have a large and growing distribution business today, and under new leadership, we have been building or acquiring new capabilities to accelerate profitable growth in 2026.

Second on our commitment to driving efficiency to free up more capital to invest.

And enhance our margins.

We are on track to deliver against our reorganization and related cost savings program of $200 million in annualized savings in 2006, increasing to $300 million in 2027.

Speaker #2: As a result, we are now growing market share in every key region, including the U.S., the largest music market in the world. Additionally, our balanced approach to driving performance across vintages has resulted in higher new release market share for Atlantic, as well as a jump in global catalog share.

Third we committed to driving incremental growth and value creation through accretive M&A.

We have developed a robust deal pipeline and look forward to sharing updates in the near future.

These efforts will be turbocharged in a capital efficient manner through our joint venture with brain, but also through organic investment as the improved free cash flow.

Speaker #2: As Robert mentioned, this has improved our Spotify Top 200 share by 6 percentage points. In addition to these investments in our core, we see tremendous opportunity to accelerate growth in distribution and direct-to-consumer.

Finally, our focus on thoughtful capital location is delivering as the investments we are making in the highest revpar markets, which include the U S. U K, Mexico, China, and Japan are delivering share growth. In addition, we're improving capital spend efficiency and with the bulk of our major tech investments behind us.

Speaker #2: We have a large and growing distribution business today, and under new leadership, we've been building or acquiring new capabilities to accelerate profitable growth in 2026.

Speaker #2: We also see tremendous opportunities to capitalize on the passionate demand from fans all over the world for physical music and direct-to-consumer offerings.

Armin Zerza: We also see tremendous opportunities to capitalize on the passionate demand from fans all over the world for physical music and direct-to-consumer offerings, areas adjacent to our core music business. More on this in upcoming quarters. Second, on our commitment to driving efficiency to free up more capital to invest and enhance our margins, we are on track to deliver against our reorganization and related cost savings program of $200 million in annualized savings in 2026, increasing to $300 million in 2027. Third, we committed to driving incremental growth and value creation through equitative M&A. We have developed a robust deal pipeline and look forward to sharing updates in the near future. These efforts will be turbocharged in a capital-efficient manner through our joint venture with Bain, but also through organic investments as we improve free cash flow.

We also see tremendous opportunities to capitalize on the passionate demand from fans all over the world for physical music and direct-to-consumer offerings, areas adjacent to our core music business. More on this in upcoming quarters. Second, on our commitment to driving efficiency to free up more capital to invest and enhance our margins, we are on track to deliver against our reorganization and related cost savings program of $200 million in annualized savings in 2026, increasing to $300 million in 2027. Third, we committed to driving incremental growth and value creation through equitative M&A. We have developed a robust deal pipeline and look forward to sharing updates in the near future. These efforts will be turbocharged in a capital-efficient manner through our joint venture with Bain, but also through organic investments as we improve free cash flow.

We should see an improvement in our free cash flow starting in 2026.

Looking forward, we see an attractive formula for us to drive shareholder value and are excited to be operating in a healthy industry with an immense set of opportunities the macro factors that underpin our outlook includes.

Speaker #2: Areas adjacent to our core music business. More on this in upcoming quarters. Second, on our commitment to driving efficiency to free up more capital to invest, and enhance our margins, we are on track to deliver against our reorganization and related cost savings program of 200 million dollars in annualized savings in 2026, increasing to 300 million dollars in 2027.

Robust global subscriber growth and rising wholesale price environment underpinned by contracts that better reflect music's increasing value new premium offering some dsp's NII.

NII is matching incremental top and bottom line opportunity for the music industry and our assets in total records.

Speaker #2: Third, we're committed to driving incremental growth and value creation through our creative M&A. We have developed a robust deal pipeline and look forward to sharing updates in the near future.

We are poised to capitalize on this environment with a strategy that will see us intensify our investments to deliver more consistent higher growth improve margins and drive shareholder value.

Speaker #2: These efforts will be turbocharged in a capital-efficient manner through our joint venture with Bain, but also through organic investments as we improve free cash flow.

While 2026, we expect to see strong topline growth, which we look to bolster through focused organic investments and initiatives in our core music business and high impact accretive M&A as well as contribution from adjacent areas, such as distribution and direct to consumer offerings.

Speaker #2: Finally, our focus on thoughtful capital allocation is delivering. The investments we are making in the highest repertoire markets, which include the U.S., U.K., Mexico, China, and Japan, are delivering share growth.

Armin Zerza: Finally, our focus on thoughtful capital allocation is delivering, as the investments we are making in the highest repertoire markets, which include the US, UK, Mexico, China, and Japan, are delivering share growth. In addition, we're improving capital spend efficiency, and with the bulk of our major tech investments behind us, we should see an improvement in our free cash flow starting in 2026. Looking forward, we see an attractive formula for us to drive shareholder value, and I'm excited to be operating in a healthy industry with an immense set of opportunities. The macro factors that underpin our outlook include robust global subscriber growth, a rising wholesale price environment underpinned by contracts that better reflect music's increasing value, new premium offerings from DSPs, and AI emerging as an incremental top and bottom-line opportunity for the music industry, our artists, and songwriters.

Finally, our focus on thoughtful capital allocation is delivering, as the investments we are making in the highest repertoire markets, which include the US, UK, Mexico, China, and Japan, are delivering share growth. In addition, we're improving capital spend efficiency, and with the bulk of our major tech investments behind us, we should see an improvement in our free cash flow starting in 2026. Looking forward, we see an attractive formula for us to drive shareholder value, and I'm excited to be operating in a healthy industry with an immense set of opportunities. The macro factors that underpin our outlook include robust global subscriber growth, a rising wholesale price environment underpinned by contracts that better reflect music's increasing value, new premium offerings from DSPs, and AI emerging as an incremental top and bottom-line opportunity for the music industry, our artists, and songwriters.

Speaker #2: In addition, we're improving capital spend efficiency, and with the bulk of our major tech investments behind us, we should see an improvement in our free cash flow starting in 2026.

In addition, we will drive bottom line growth by our operating leverage and our cost savings plan, which will contribute hollered 50 to 200 basis points of adjusted OIBDA margin improvement, we expect savings to increase sequentially as we progress through the year.

Speaker #2: Looking forward, we see an attractive formula for us to drive shareholder value and are excited to be operating in a healthy industry with an immense set of opportunities.

Speaker #2: The macro factors that underpin our outlook include robust global subscriber growth, a rising wholesale price environment underpinned by contracts that better reflect music's increasing value, new premium offerings from DSPs, and AI emerging as an incremental top and bottom line opportunity for the music industry and our artists and songwriters.

And finally, we see tremendous potential in new incremental growth areas, particularly in AI licensing deal, which we plan to discuss in future calls.

In conclusion, we are proud of how we've rebounded from a challenging first half in 2025 to deliver solid top and bottom line growth in the second half with strong momentum as we head into 2026, we look forward to providing regular updates as we meet our milestones.

Speaker #2: We are poised to capitalize on this environment with a strategy that will see us intensify our investments to deliver more consistent, higher growth, improve margins, and drive shareholder value.

Armin Zerza: We are poised to capitalize on this environment with a strategy that will see us intensify our investments to deliver more consistent, higher growth, improve margins, and drive shareholder value. For 2026, we expect to see strong top-line growth, which we look to bolster through focused organic investments and initiatives in our core music business and high-impact, accretive M&A, as well as contribution from adjacent areas such as distribution and direct-to-consumer offerings. In addition, we will drive bottom-line growth via operating leverage and our cost savings plan, which will contribute 150 to 200 basis points of adjusted OIBDA margin improvement. We expect savings to increase sequentially as we progress through the year. Finally, we see tremendous potential in new incremental growth areas, particularly in AI licensing deals, which we plan to discuss in future calls.

We are poised to capitalize on this environment with a strategy that will see us intensify our investments to deliver more consistent, higher growth, improve margins, and drive shareholder value. For 2026, we expect to see strong top-line growth, which we look to bolster through focused organic investments and initiatives in our core music business and high-impact, accretive M&A, as well as contribution from adjacent areas such as distribution and direct-to-consumer offerings. In addition, we will drive bottom-line growth via operating leverage and our cost savings plan, which will contribute 150 to 200 basis points of adjusted OIBDA margin improvement. We expect savings to increase sequentially as we progress through the year. Finally, we see tremendous potential in new incremental growth areas, particularly in AI licensing deals, which we plan to discuss in future calls.

With that we'll take your questions.

Thank you if you would like to ask a question. Please press star one on your telephone keypad.

Speaker #2: For 2026, we expect to see strong top line growth, which we look to bolster through focused organic investments and initiatives in our core music business and high-impact creative M&A as well as contribution from adjacent areas such as distribution and direct to consumer offerings.

To withdraw your question press Star one.

Please ensure that your phone is not on mute when called upon thank you.

Your first question comes from.

Morale with Evercore ISI your line is open.

Speaker #2: In addition, we will drive bottom line growth via operating leverage and our cost savings plans, which will contribute 150 to 200 basis points of adjusted OIPTA margin improvement.

Great.

Good morning, and thanks for taking my question. There is a lot to unpack, but one area that I'd love to get your updated outlook on us with Reits monetization, especially in the context of rising music engagement across platforms, we've seen the pace of innovation and product rollouts across the dsp's accelerated meaningfully and everyone from the streaming services to artists.

Speaker #2: We expect savings to increase sequentially as we progress through the year. And finally, we see tremendous potential in new incremental growth areas particularly in AI licensing deals which we plan to discuss in future calls.

Even a ticketing platforms like ticketmaster's exploring new ways to leverage AI, all with the goal of driving deeper engagement.

Speaker #2: In conclusion, we are proud of how we rebounded from a challenging first half in 2025 to deliver solid top and bottom line growth in the second half.

Armin Zerza: In conclusion, we are proud of how we rebounded from a challenging first half in 2025 to deliver solid top and bottom-line growth in the second half, with strong momentum as we head into 2026. We look forward to providing regular updates as we meet our milestones. With that, we'll take your questions.

In conclusion, we are proud of how we rebounded from a challenging first half in 2025 to deliver solid top and bottom-line growth in the second half, with strong momentum as we head into 2026. We look forward to providing regular updates as we meet our milestones. With that, we'll take your questions.

There's an ongoing debate between those who see the labels is uniquely positioned to benefit from these innovations and those who believe that the labels will remain maybe more passive beneficiaries and therefore, not necessarily see upside to Robert you've already touched on parts of this but as you've gone through the latest round of DSP renewals and clearly continue to engage with other.

Speaker #2: With strong momentum as we head into 2026. We look forward to providing regular updates as we meet our milestones. With that, we'll take your questions.

Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure that your phone is not on mute when called upon. Thank you. Your first question comes from Cutgun Merrell with Evercore ISI. Your line is open.

So across the ecosystem, how are you thinking about <unk> role in capturing incremental value in this next chapter of industry growth. Thank you.

Speaker #1: Please ensure that your phone is not on mute when called upon. Thank you. Your first question comes from Cutgun Morrell with Evercore ISI. Your line is open.

Thank you.

I will start with the word incremental that you just mentioned.

See there is an incremental sorry.

This is an incremental opportunity.

For not just for <unk>, but for the music industry as a whole.

Speaker #2: Great. Good morning and thanks for taking the question. There's a lot to unpack, but one area that I'd love to get your updated outlook on is with rights monetization.

[Analyst]: Great. Good morning, and thanks for taking the question. There's a lot to unpack, but one area that I'd love to get your updated outlook on is with rights monetization, especially in the context of rising music engagement across platforms. We've seen the pace of innovation and product rollouts across the DSPs accelerate meaningfully, and everyone from the streaming services to artists to even ticketing platforms like Ticketmaster is exploring new ways to leverage AI, all with the goal of driving deeper engagement. That said, there's an ongoing debate between those who see the labels as uniquely positioned to benefit from these innovations, and those who believe that the labels will remain maybe more passive beneficiaries, and therefore not necessarily see upside.

Kutgun Maral: Great. Good morning, and thanks for taking the question. There's a lot to unpack, but one area that I'd love to get your updated outlook on is with rights monetization, especially in the context of rising music engagement across platforms. We've seen the pace of innovation and product rollouts across the DSPs accelerate meaningfully, and everyone from the streaming services to artists to even ticketing platforms like Ticketmaster is exploring new ways to leverage AI, all with the goal of driving deeper engagement. That said, there's an ongoing debate between those who see the labels as uniquely positioned to benefit from these innovations, and those who believe that the labels will remain maybe more passive beneficiaries, and therefore not necessarily see upside.

Secondly.

We are determined and I've decided that were the drivers not the passengers of this incremental opportunity.

Speaker #2: Especially in the context of rising music engagement across platforms, we've seen the pace of innovation and product rollouts across the DSPs accelerate meaningfully. Everyone from the streaming services to artists, and even ticketing platforms like Ticketmaster, is exploring new ways to leverage AI.

The reason for that is the space is moving lightning fast.

There's a great demand for IP, there is great demand for stardom.

And companies like ours, who are working to represent both of those need to drive this change and that's exactly what we've decided to do.

Speaker #2: All with the goal of driving deeper engagement. That said, there's an ongoing debate between those who see the labels as uniquely positioned to benefit from these innovations and those who believe that the labels will remain, maybe more passive beneficiaries, and therefore not necessarily see upside.

Posted a <unk> last night and it is not always got a chance to read it. Please do.

It is listed on our website and it outlines our principles under which we focus.

Speaker #2: So, Robert, you've already touched on parts of this, but as you've gone through the latest round of DSP renewals and clearly continue to engage with other partners across the ecosystem, how are you thinking about WMG's role in capturing incremental value in this next chapter of industry growth?

[Analyst]: Robert, you've already touched on parts of this, but as you've gone through the latest round of DSP renewals and clearly continue to engage with other partners across the ecosystem, how are you thinking about WMG's role in capturing incremental value in this next chapter of industry growth? Thank you.

Robert, you've already touched on parts of this, but as you've gone through the latest round of DSP renewals and clearly continue to engage with other partners across the ecosystem, how are you thinking about WMG's role in capturing incremental value in this next chapter of industry growth? Thank you.

And guide our dealmaking.

In the HOA.

There are three simple principles.

We will do agreements with partners, who commit to a licensed models.

We will do it on economic terms that properly reflect the value of music and what I mean by that is that our deal terms are tied to usage and revenue growth.

Speaker #2: Thank you.

Speaker #3: Thank you. I will start with the word incremental that you just mentioned. We see this as an incremental—sorry—we see this as an incremental opportunity for not just for WMG, but for the music industry as a whole.

Robert Kyncl: Thank you. I will start with the word incremental that you just mentioned. We see this as an incremental opportunity for not just for WMG, but for the music industry as a whole. Secondly, we are determined and have decided that we're the drivers, not the passengers, of this incremental opportunity. The reason for that is the space is moving lightning fast. There's a great demand for IP, there's a great demand for stardom, and companies like ours who are working to represent both of those need to drive this change. That's exactly what we've decided to do. I posted a blog post last night in case not all of you got a chance to read it. Please do. It's listed on our website, and it outlines our principles under which we focus and guide our deal-making in the age of AI.

And importantly that artist and song others have the opportunity and right to opt in for any.

New songs that implicate their name image likeness and voice.

Speaker #3: Secondly, we are determined and have decided that we're the drivers, not the passengers of this incremental opportunity. The reason for that is this space is moving lightning fast.

We see this as an incremental opportunity because the past has shown us that changes like this always create one.

Go back.

2025 years with the democratization of distribution.

Speaker #3: There's a great demand for IP. There's a great demand for stardom. And companies like ours, who are working to represent both of those, need to drive this change.

That has unlocked unlimited shelf space, which has unlocked deep personalization of music for users, which have online growth in volume of people signing up for subscription services and enjoying them and it has unlocked tremendous value and catalogs and music IP overall for all of US. So it has been a net positive for us.

Speaker #3: And that's exactly what we've decided to do. I posted a blog post last night in case not all of you got a chance to read it.

Speaker #3: Please do. It's listed on our website. And it outlines our principles under which we focus and guide our deal-making in the age of AI.

That has that has created a lot of value.

We see AI as the the <unk>.

Democratization of creation.

Speaker #3: There are three simple principles. We'll do agreements with partners who commit to licensed models. We'll do it on economic terms that properly reflect the value of music.

Robert Kyncl: There are three simple principles. We'll do agreements with partners who commit to licensed models. We'll do it on economic terms that properly reflect the value of music. What I mean by that is that our deal terms are tied to usage and revenue growth. Importantly, artists and songwriters have the opportunity and right to opt in for any new songs that implicate their name, image, likeness, and voice. We see this as an incremental opportunity because the past has shown us that changes like this always create one. If you go back 20 to 25 years with the democratization of distribution, it has unlocked unlimited shelf space, which has unlocked deep personalization of music for users, which has unlocked growth and volume of people signing up for subscription services and enjoying them.

There are three simple principles. We'll do agreements with partners who commit to licensed models. We'll do it on economic terms that properly reflect the value of music. What I mean by that is that our deal terms are tied to usage and revenue growth. Importantly, artists and songwriters have the opportunity and right to opt in for any new songs that implicate their name, image, likeness, and voice. We see this as an incremental opportunity because the past has shown us that changes like this always create one. If you go back 20 to 25 years with the democratization of distribution, it has unlocked unlimited shelf space, which has unlocked deep personalization of music for users, which has unlocked growth and volume of people signing up for subscription services and enjoying them.

And we believe that it brings what we flagged which is interactivity.

Which is generally correlated with value creation. If you look at across all kinds of media industries. The more lean forward the order with your compound whether you're focused on it from watching it or whether you're interacting with your hands fingers or whether you go in person and engage.

Speaker #3: And what I mean by that is that our deal terms are tied to usage and revenue growth. Importantly, artists and songwriters have the opportunity and right to opt in for any new songs that implicate their name, image, likeness, and voice.

The value per hour goes up.

That's why we're focused on and that's why I believe this is a tremendous incremental opportunity for us.

Speaker #3: We see this as an incremental opportunity because the past has shown us that changes like this always create one. If you go back 20, 25 years, with the democratization of distribution, it has unlocked unlimited shelf space, which has unlocked deep personalization of music for users, which has unlocked growth in the volume of people signing up for subscription services.

And we are going to be in the driver's seat.

In terms of.

Our approach in addition to our three principles.

Our strategy is simple we have three els legislate litigate and license.

You are familiar with our legislation efforts like the Opex.

But we're working on NBC.

Speaker #3: And enjoying them. It has unlocked tremendous value in catalogs and music IP overall for all of us. So, it has been a net positive force that has created a lot of value.

Robert Kyncl: It has unlocked tremendous value in catalogs and music IP overall for all of us. It has been a net positive force that has created a lot of value. We see AI as the democratization of creation, and we believe that it brings what we've lacked, which is interactivity, which is generally correlated with value creation. If you look across all kinds of media industries, the more lean forward you are with your content, whether you're focused on it and watching it, or whether you're interacting with your hands and your fingers, or whether you go in person and engage, the value per hour goes up. That's why we're focused on it. That's why I believe this is a tremendous incremental opportunity for us, and we are going to be in the driver's seat.

It has unlocked tremendous value in catalogs and music IP overall for all of us. It has been a net positive force that has created a lot of value. We see AI as the democratization of creation, and we believe that it brings what we've lacked, which is interactivity, which is generally correlated with value creation. If you look across all kinds of media industries, the more lean forward you are with your content, whether you're focused on it and watching it, or whether you're interacting with your hands and your fingers, or whether you go in person and engage, the value per hour goes up. That's why we're focused on it. That's why I believe this is a tremendous incremental opportunity for us, and we are going to be in the driver's seat.

On the litigation front also familiar with various lawsuits, which have been out there, but we use those first two in order to achieve the third which is licensed because that is the most powerful lever to chart the path for the future for our audience all matters to drive incremental value and to make sure that we have are fair and correlated chair.

Speaker #3: We see AI as the democratization of creation, and we believe that it brings what we've lacked, which is interactivity, generally correlated with value creation.

<unk> and revenue driving so we're really excited about this the company is energized and.

Yeah.

Speaker #3: If you look across all kinds of media industries, the more lean forward you are with your content—whether you're focused on it and watching it, or whether you're interacting with your hands and your fingers, or whether you go in person and engage—the value per hour goes up.

Onward.

Very helpful. Thank you.

The next question comes from Benjamin Black with Deutsche Bank. Your line is open.

Great. Good morning, Thank you for taking my questions two for Armen.

Speaker #3: That's why we're focused on it. That's why I believe this is a tremendous incremental opportunity for us, and we are going to be in the driver's seat.

Could you talk about the building blocks behind your expectation for for topline growth in 2020, maybe maybe dig into how youre thinking about paid streaming growth just given the broader expectation for wholesale or parts of minimum increases beginning in calendar 2026, and then secondly.

Speaker #3: In terms of our approach, in addition to our three principles, our strategy is simple. We have three Ls: legislate, litigate, and license. And you're familiar with our legislation efforts like the No Fakes Act that we're working on in DC.

Robert Kyncl: In terms of our approach, in addition to our three principles, our strategy is simple. We have three Ls: legislate, litigate, and license. You're familiar with our legislation efforts, like the No Fakes Act that we're working on in DC on the litigation front. You're also familiar with various lawsuits which have been out there. We use those first two in order to achieve the third, which is license, because that is the most powerful lever to chart the path for the future for our artists and songwriters, to drive the incremental value, and to make sure that we have our fair and correlated share of usage and revenue driving. We're really excited about this. The company's energized and onward.

In terms of our approach, in addition to our three principles, our strategy is simple. We have three Ls: legislate, litigate, and license. You're familiar with our legislation efforts, like the No Fakes Act that we're working on in DC on the litigation front. You're also familiar with various lawsuits which have been out there. We use those first two in order to achieve the third, which is license, because that is the most powerful lever to chart the path for the future for our artists and songwriters, to drive the incremental value, and to make sure that we have our fair and correlated share of usage and revenue driving. We're really excited about this. The company's energized and onward.

Secondly on margin.

Savings aside how.

Speaker #3: On the litigation front, you're also familiar with various lawsuits that have been out there. But we use those first two in order to achieve the third, which is license.

How much margin expense and do you expect to deliver organically next year.

What's your what's your longer term margin.

Speaker #3: Because that is the most powerful lever to charge the past for the future for our artists and songwriters to drive the incremental value and to make sure that we have our fair and correlated share to usage and revenue driving.

Perhaps sort of talk us through the puts and takes in achieving that as they look to drive incremental revenue growth in lower margin areas like distribution and PTC. Thank you very much.

Well first of all Hi, Ben.

Speaker #3: So we're really excited about this. The companies energized. And

First very very happy with the results we delivered.

In the last two quarters and just the last quarter.

Speaker #3: onward. It's very helpful.

And.

As it relates to streaming we believe that these results are pretty much reflective of.

[Analyst]: It's very helpful. Thank you.

Kutgun Maral: It's very helpful. Thank you.

Speaker #2: Thank

Speaker #2: you. The next question comes

Operator: The next question comes from Benjamin Black with Deutsche Bank. Your line is open.

Speaker #1: from Benjamin Black with Deutsche Bank. Your line is.

What we should expect in the first quarter was 26 two.

Speaker #1: open. Great.

To your question on additional growth building blocks, starting in Colombia, 27, sorry 26.

[Analyst]: Great. Good morning. Thank you for taking my questions. Last two for Armin. Armin, could you talk about the building blocks behind your expectation for top-line growth in 2026? Maybe dig into how you're thinking about paid streaming growth, just given the broader expectation for wholesale or per sub minimum increases beginning in Canada 2026. Secondly, on margins, cost savings aside, how much margin expansion do you expect to deliver organically next year? I mean, what's your longer-term margin target? Perhaps sort of talk us through the puts and takes in achieving that as you look to drive incremental revenue growth in lower-margin areas like distribution and DTC. Thank you very much.

Benjamin Black: Great. Good morning. Thank you for taking my questions. Last two for Armin. Armin, could you talk about the building blocks behind your expectation for top-line growth in 2026? Maybe dig into how you're thinking about paid streaming growth, just given the broader expectation for wholesale or per sub minimum increases beginning in Canada 2026. Secondly, on margins, cost savings aside, how much margin expansion do you expect to deliver organically next year? I mean, what's your longer-term margin target? Perhaps sort of talk us through the puts and takes in achieving that as you look to drive incremental revenue growth in lower-margin areas like distribution and DTC. Thank you very much.

Speaker #4: Good morning. Thank you for taking my questions for Armin. Armin, could you talk about the building blocks behind your expectation for top-line growth in 2026?

There are a few of that.

I'd like to mention the first one is that in addition to their market share momentum that we have seen in global subscriber growth. We will of course benefit from their contractual wholesale price increases that we have agreed with several top USPS as Robert mentioned, we are actually agreements with four of the five.

Speaker #4: Maybe dig into how you're thinking about paid streaming growth, just given the broader expectation for wholesale or per sub minimum increases beginning in calendar 2026.

Speaker #4: And then, secondly, on margins, cost savings aside, how much margin expansion do you expect to deliver organically next year? And I mean, what's your longer-term margin target?

Using 2020 is starting to start to increase wholesale.

Price.

Prices starting in calendar year 2006.

Second area is that in addition to the investments there.

Speaker #4: Perhaps sort of talk us through the puts and takes in achieving that as you look to drive incremental revenue growth in lower-margin areas like distribution and D2C.

We have been doing on.

Hi, Roy markets and projects.

We have a very robust pipeline of accretive M&A that will start to materialize in 2006, including on many projects that we have been working on through our joint venture with pain.

Speaker #4: Thank you very much.

Speaker #3: Well, first of all, hi, Ben. Yeah, first, I'm very, very happy with the results we delivered in the last two quarters, not just the last quarter.

Armin Zerza: Well, first of all, hi, Ben. We are first very, very happy with the results we delivered in the last two quarters, not just the last quarter. As it relates to streaming, we believe that these results are pretty much reflective of what we should expect in the first quarter of 2026. Now, to your question on additional growth building blocks starting in calendar year 2027, sorry, 2026, there are a few that I'd like to mention. The first one is that in addition to the market share momentum that we have seen in global subscriber growth, we will, of course, benefit from the contractual wholesale price increases that we have agreed now with several top DSPs. As Robert mentioned, we have actually agreements now with four of the five top DSPs in 2026 to start to increase wholesale prices starting in calendar year 2026.

The third area is that.

Speaker #3: And as it relates to streaming, we believe that these results are pretty much reflective of what we should expect in the first quarter of '26.

We are working with have been working on expanding adjacent areas.

One area I'd like to mention is distribution as you know we have a new leader there.

Speaker #3: Now, to your question on additional growth building blocks, starting in calendar year '27, sorry, '26, there are a few that I'd like to mention.

To better understand how they can accelerate growth in this area.

We now feel confident that we can accelerate growth in that area, starting in Colombia, and six and last but not least there are many upside opportunities that are not included in our guidance like premium offerings.

Speaker #3: The first one is that in addition to the market pure momentum that we have seen in global subscriber growth, we will, of course, benefit from the contractual wholesale price increases that we have agreed now with several top ESPs as Robert mentioned, we have actually agreements now with four of the five top ESPs in 2026 to start to increase wholesale price prices starting in calendar year '26.

And obviously, the AI as an opportunity as well, but just discussed.

Finally from a leadership perspective, we are very confident that we have leadership in place across the company that will help us deliver and accelerate growth.

Now to your margin question Ben.

We have a very strong program to improve margin over time.

Speaker #3: The second area is that, in addition to the investments that we have been doing on high ROI markets and projects, we have a very robust pipeline of accretive M&A that will start to materialize in 2026, including many projects that we have been working on throughout 2020 with Bain.

Armin Zerza: The second area is that in addition to the investments that we have been doing on high ROI markets and projects, we have a very robust pipeline of accretive M&A that will start to materialize in 2026, including on many projects that we have been working on throughout the winter with Bain. The third area is that we are working or have been working on expanding adjacent areas. One area I'd like to mention is distribution. As you know, we have a new leader there, and we've done a lot of work to better understand how we can accelerate growth in this area. We really now feel confident that we can accelerate growth in that area starting in calendar year 2026. Last but not least, there are many upside opportunities that are not included in our guide, like premium offerings from DSPs.

The second area is that in addition to the investments that we have been doing on high ROI markets and projects, we have a very robust pipeline of accretive M&A that will start to materialize in 2026, including on many projects that we have been working on throughout the winter with Bain. The third area is that we are working or have been working on expanding adjacent areas. One area I'd like to mention is distribution. As you know, we have a new leader there, and we've done a lot of work to better understand how we can accelerate growth in this area. We really now feel confident that we can accelerate growth in that area starting in calendar year 2026. Last but not least, there are many upside opportunities that are not included in our guide, like premium offerings from DSPs.

Program, we're implementing is a big strategic reorganization and as you have seen while we're doing this over I would say reorganization, we actually accelerating growth that program will deliver $200 million of savings in fiscal year, 2006, and up to $300 million in fiscal year 2007, So we're actually very well.

We're comfortable with our guidance of margin expansion.

Speaker #3: The third area is that we are working or have been working on expanding adjacent areas. One area I'd like to mention is distribution. As you know, we have a new leader there, and we've done a lot of work to better understand how we can accelerate growth in this area.

So on a basis points next fiscal year. In addition to that we will improve margins through operating leverage there are a few areas, which we are leveraging the first one is as we accelerate our high margin streaming business margin will approve the second one is through our work on accretive M&A, especially couple of M&A.

Speaker #3: We really now feel confident that we can accelerate growth in that area starting in calendar year '26. And last but not least, there are many upside opportunities that are not included in our guide, like premium offerings from ESPs.

<unk>, which is higher margin accretive business is going to improve margin and last but not least <unk>.

I think the quote.

So net we're really really confident in our margin building book looked at from a cost savings perspective, but also overall from organic perspective in fact in the mid to long term, we are targeting margins in the mid to high <unk> and you shouldnt be surprised about that when you look at our EBITDA margins in fiscal year 2025.

Speaker #3: And obviously, AI is an opportunity as Robert just discussed. Finally, from a leadership perspective, we are very confident that we have now leadership in place across the company that will help us deliver and accelerate growth.

Armin Zerza: Obviously, AI is an opportunity, as Robert just discussed. Finally, from a leadership perspective, we are very confident that we have now leadership in place across the company that will help us deliver and accelerate growth. Now, to your margin question, Ben, we have a very strong program to improve margin over time. The first program we are implementing is a big strategic reorganization. As you have seen, while we're doing this reorganization, we're actually accelerating growth. That program will deliver $200 million of savings in fiscal year 2026 and up to $300 million in fiscal year 2027. We're actually very, very comfortable with our guide of margin expansion of 150 to 200 basis points next fiscal year. In addition to that, we will improve margin through operating leverage. There are a few areas which we are leveraging.

Obviously, AI is an opportunity, as Robert just discussed. Finally, from a leadership perspective, we are very confident that we have now leadership in place across the company that will help us deliver and accelerate growth. Now, to your margin question, Ben, we have a very strong program to improve margin over time. The first program we are implementing is a big strategic reorganization. As you have seen, while we're doing this reorganization, we're actually accelerating growth. That program will deliver $200 million of savings in fiscal year 2026 and up to $300 million in fiscal year 2027. We're actually very, very comfortable with our guide of margin expansion of 150 to 200 basis points next fiscal year. In addition to that, we will improve margin through operating leverage. There are a few areas which we are leveraging.

Speaker #3: Now, to your margin question, Ben, we have a very strong program to improve margin over time. The first program we are implementing is a big strategic reorganization.

We closed 25 with an EBITA margin of about 25%.

You know EBITDA includes our normalized cost savings.

Speaker #3: And as you have seen, while we're doing this reorganization, we're actually accelerating growth. That program will deliver $200 million of savings in fiscal year '26 and up to $300 million in fiscal year '27.

Basically delivering over the next couple of years and so you should expect over time that our adjusted OIBDA will approach or adjusted EBITDA margins.

He has never started with a debt to continue to grow margins.

Speaker #3: So we're actually very, very comfortable with our guide of margin expansion of $150 to $200 basis points next fiscal year. In addition to that, we will improve margin to operating leverage.

Thank you very very helpful.

The next question comes from Peter Zaffino with Wolfe Research Your line is open.

Speaker #3: There are a few areas that we are leveraging. The first one is that as we accelerate our high-margin streaming business, margins will improve. The second one is through our work on accretive M&A, especially catalog M&A, which is a higher-margin, accretive business that will improve margins.

Okay.

Armin Zerza: The first one is, as we accelerate our high-margin streaming business, margin will improve. The second one is through our work on accretive M&A, especially catalog M&A, which is higher margin, accretive businesses will improve margin. Last but not least, DSP pricing will flow through to margin. In that, we're really, really confident in our margin building blocks, not just from a cost savings perspective, but also overall from our organic perspective. In fact, in the mid to long term, we are targeting margins in the mid to high 20s. You shouldn't be surprised about that. When you look at our EBITDA margins in fiscal year 2025, we closed 2025 with an EBITDA margin of about 25%. As you know, EBITDA includes our normalized cost savings we're now basically delivering over the next couple of years.

The first one is, as we accelerate our high-margin streaming business, margin will improve. The second one is through our work on accretive M&A, especially catalog M&A, which is higher margin, accretive businesses will improve margin. Last but not least, DSP pricing will flow through to margin. In that, we're really, really confident in our margin building blocks, not just from a cost savings perspective, but also overall from our organic perspective. In fact, in the mid to long term, we are targeting margins in the mid to high 20s. You shouldn't be surprised about that. When you look at our EBITDA margins in fiscal year 2025, we closed 2025 with an EBITDA margin of about 25%. As you know, EBITDA includes our normalized cost savings we're now basically delivering over the next couple of years.

Good morning, I wondered if you would talk about your successful market share gains over the last year.

Maybe discuss what you're doing differently and if you could provide any context on how each of your flagship frontline labels are performing thank you.

Speaker #3: And last but not least, ESP pricing with floats through to margin. So in that, we're really, really confident in our margin building blocks, not just from a cost savings perspective, but also overall from our organic perspective.

Thank you.

So first.

I am pleased to say and keep on reiterating that our strategy is working.

It's great for it to show up in the results.

See the progress that we're making.

Speaker #3: In fact, in the mid- to long-term, we are targeting margins in the mid- to high-20s. And you shouldn't be surprised about that when you look at our EBITDA margins in fiscal year '25.

Our market share Hasnt grown just in one or two places it's really been broad based.

Across both of our flagship labels.

Speaker #3: We closed '25 with an EBITDA margin of about 25%. As you know, EBITDA includes our normalized cost savings. We're now basically delivering over the next couple of years and so you should expect over time that our adjusted EBITDA will approach our adjusted EBITDA margins in the mid 20s, and then we'll start to move from that to continue to grow margins.

Uh huh.

As well as all of our regions in the U S. We've increased by a point.

6% in the U S year on year in Q4 25. This is according to eliminate.

Armin Zerza: You should expect over time that our adjusted OIBDA will approach our adjusted EBITDA margins in the mid-20s, and they will start to build from that to continue to grow margin.

You should expect over time that our adjusted OIBDA will approach our adjusted EBITDA margins in the mid-20s, and they will start to build from that to continue to grow margin.

And we've got similar improvement around the world and EMEA Latam and APAC.

And plus six percentage points on Spotify top 200 in fiscal 'twenty, fives, and notably Threep occupying the number two spot for nearly half of the year, there which is incredible.

Speaker #2: Thank you very, very helpful.

[Analyst]: Thank you. Very, very helpful.

Benjamin Black: Thank you. Very, very helpful.

Speaker #1: The next question comes from Peter Cepino with Wolf Research. Your line is

Operator: The next question comes from Peter Zeppino with Wolfe Research. Your line is open.

Speaker #1: open. Good morning.

It is really great to see the company firing on all cylinders creatively as well as financially.

[Analyst]: Good morning. I wondered if you would talk about your successful market share gains over the last year, maybe discuss what you're doing differently, and if you could provide any context on how each of your flagship frontline labels are performing. Thank you.

Peter Supino: Good morning. I wondered if you would talk about your successful market share gains over the last year, maybe discuss what you're doing differently, and if you could provide any context on how each of your flagship frontline labels are performing. Thank you.

Speaker #5: I wondered if you would talk about your successful market share gains over the last year, maybe discuss what you're doing differently. And if you could provide any context on how each of your flagship frontline labels are performing.

It really has come come down to a lot of focus on August.

Which obviously has been there.

For for a long time.

Speaker #5: Thank you.

In our DNA and we continue to lean into it.

Speaker #3: Sure. Thank you. So first, I'm just pleased to say and keep on reiterating that our strategy is working. It's great for it to show up in the results, and see the progress that we're making.

Robert Kyncl: Sure. Thank you. First, I'm just pleased to say and keep on reiterating that our strategy is working. It's great for it to show up in the results and see the progress that we're making. Our market share hasn't grown just in one or two places. It's really been broad-based across both our flagship labels, as well as all of our regions. In the US, we've increased by 0.6% in the US year on year in Q4 2025. This is according to Luminate. We had similar improvement around the world in EMEA, LATAM, and APAC, plus 6 percentage points on Spotify top 200 in fiscal 2025. Notably, we've occupied the number two spot for nearly half the year there, which is incredible. It is really great to see the company firing on all cylinders creatively, as well as financially.

But we also focus on.

Our distribution business, we focus on our catalog.

Got a lot of success in terms of revitalizing our catalogues seem excess of Buckingham next which was originally released in 1973 being number 11 on Billboard album Chart number six in the U S. It's incredible to see the power of our IP and what it is that we can do with it.

Speaker #3: Our market share hasn't grown just in one or two places. It's really been broad-based. Across both our flagship labels, as well as all of our regions.

Speaker #3: In the U.S., we've increased by 0.6%. Year on year, in Q4 '25, this is according to Luminate. We had similar improvement around the world.

In terms of our returning artist Cardi B.

21 pilots being number one with our albums in the U S. At Sharon if acquirer in the U K and obviously I mentioned our.

Speaker #3: In EMEA, LATAM, and APAC. And plus 6 percentage points on Spotify top 200 and fiscal '25. And notably, we've occupied the number two spot for nearly half the year there.

Our development stories with Alex Warren.

Spending 10 weeks on number one.

Number one on the Billboard Hot 100, Global 200, and somber hitting number one on Spotify Global chart and southern three.

Speaker #3: Which is incredible. So it is really great to see the company firing on all cylinders creatively. As well as financially. And it really has come down to a lot of focus on artist development, which obviously has been there.

Sat in the top three for over 10 weeks.

No.

It's just broad based.

Robert Kyncl: It really has come down to a lot of focus on artist development, which obviously has been there for a long time. It's in our DNA, and we continue to lean into it. We also focus on our distribution business, and we focus on our catalog. We've had a lot of success in terms of revitalizing our catalog, seeing the success of Buckingham Nicks, which was originally released in 1973, being number 11 on the Billboard album chart and number 6 in the US. It's incredible to see the power of IP and what it is that we can do with it in terms of our returning artists, Cardi B and Twenty One Pilots being number one with their albums in the US, and Ed Sheeran and Biffy Clyro in the UK.

It really has come down to a lot of focus on artist development, which obviously has been there for a long time. It's in our DNA, and we continue to lean into it. We also focus on our distribution business, and we focus on our catalog. We've had a lot of success in terms of revitalizing our catalog, seeing the success of Buckingham Nicks, which was originally released in 1973, being number 11 on the Billboard album chart and number 6 in the US. It's incredible to see the power of IP and what it is that we can do with it in terms of our returning artists, Cardi B and Twenty One Pilots being number one with their albums in the US, and Ed Sheeran and Biffy Clyro in the UK.

Artist or band returning artists' catalogs all regions all divisions.

There's been a lot of work that really started to hit together.

Speaker #3: For a long time, it's in our DNA, and we continue to lean into it. But we also focus on our distribution business. We focus on our catalog.

And we just we have really focused on our operations, making sure that we're making the right decisions.

So our capital allocation and.

Speaker #3: We've had a lot of success in terms of revitalizing our catalogs, seeing the success of Buckingham Nyx, which was originally released in 1973, being number 11 on Billboard album chart and number six in the US.

And there we have strong pipelines both for our Odyssey releases as well as for M&A as Arvind mentioned, so our playbook is working and our investment as our investment is a key priority in markets.

Really bearing fruit.

Speaker #3: It's incredible to see the power of IP and what it is that we can do with it. In terms of our returning artists, Cardi B, and 21 Pilots being number one, with their albums in the US and Ed Sheeran and Biffy Clyro in the UK.

Okay.

The next question comes from Michael Morris with Guggenheim Securities. Your line is open.

Thank you thanks for the details and for taking my questions I wanted to follow up on some of the growth components.

Speaker #3: And obviously, I mentioned our artist development stories with Alex Warren, spending 10 weeks on number one at number one on Billboard Hot 100 and Global 200, and somber hitting number one on Spotify global chart and set their three set in the top three for over 10 weeks.

Robert Kyncl: Obviously, I mentioned our artist development stories with Alex Warren spending 10 weeks at number one on Billboard Hot 100 and Global 200, and Samba hitting number one on Spotify Global Chart, and Sether III sat in the top three for over 10 weeks. It's just broad-based: artist development, returning artists, catalogs, all regions, all divisions. It's just been a lot of work that really started to hit together. We have really focused on our operations, making sure that we're making the right decisions around capital allocation, and that we have strong pipelines both for our artist releases as well as for M&A, as Armin mentioned. Our playbook is working, and our investment is a key priority in markets, and it's really bearing fruit.

Obviously, I mentioned our artist development stories with Alex Warren spending 10 weeks at number one on Billboard Hot 100 and Global 200, and Samba hitting number one on Spotify Global Chart, and Sether III sat in the top three for over 10 weeks. It's just broad-based: artist development, returning artists, catalogs, all regions, all divisions. It's just been a lot of work that really started to hit together. We have really focused on our operations, making sure that we're making the right decisions around capital allocation, and that we have strong pipelines both for our artist releases as well as for M&A, as Armin mentioned. Our playbook is working, and our investment is a key priority in markets, and it's really bearing fruit.

That you highlighted as we look into 2006 and beyond.

First on your M&A plans arm and you alluded to M&A as a potential accelerant to growth in the coming year and.

Could you share more detail on what we can look forward to and how much of an incremental growth driver. This can be for you.

Speaker #3: So it's just broad-based. Artist development, returning artists, catalogs, all regions, all divisions. So it's just been a lot of work that really started to hit together.

And then also you just mentioned distribution is a strategic focus area and a potential driver of growth as early as 26 as well. So can you expand on this a bit what changed about your strategy if anything and.

Speaker #3: And we just, we have really focused on our operations. Making sure that we're making the right decisions. Around capital allocation. And that we have strong pipelines, both for our artists' releases, as well as for M&A, as Armin mentioned.

What gives you confidence that this can be a bigger contributor to growth in the coming year. Thanks.

Thank you so on the M&A side.

We have a very strong pipeline in place, which as I mentioned, we expect to start to materialize, starting what kind of near 26.

Speaker #3: So our playbook is working, and our investment as our investment is a key priority in markets. And it's really bearing fruit.

As you probably know we are focused on a few large opportunities where we as a publisher can add value in a way that creates scale and a test for artists and songwriters.

Speaker #1: The next question comes from Michael Morris with Guggenheim Securities. Your line is

Operator: The next question comes from Michael Morris with Guggenheim Securities. Your line is open.

Speaker #1: open.

Speaker #6: Thank

Speaker #6: you, thanks for the details and for taking my questions. I wanted to follow up on some of the growth components that you highlighted as we look into '26 and beyond.

[Analyst]: Thank you. Thanks for the details and for taking my questions. I wanted to follow up on some of the growth components that you highlighted as we look into 2026 and beyond. First, on your M&A plans, Armin, you alluded to M&A as a potential accelerant to growth in the coming year. Can you share more detail on what we can look forward to and how much of an incremental growth driver this can be for you? You just mentioned distribution as a strategic focus area and a potential driver of growth as early as 2026 as well. Can you expand on this a bit? What changed about your strategy, if anything, and what gives you confidence that this can be a bigger contributor to growth in the coming year? Thanks.

Michael Morris: Thank you. Thanks for the details and for taking my questions. I wanted to follow up on some of the growth components that you highlighted as we look into 2026 and beyond. First, on your M&A plans, Armin, you alluded to M&A as a potential accelerant to growth in the coming year. Can you share more detail on what we can look forward to and how much of an incremental growth driver this can be for you? You just mentioned distribution as a strategic focus area and a potential driver of growth as early as 2026 as well. Can you expand on this a bit? What changed about your strategy, if anything, and what gives you confidence that this can be a bigger contributor to growth in the coming year? Thanks.

But also in a way that delivers a strong return for us.

Key focus simply is a couple of business or a couple of businesses out there in the market why because they are highly accretive and therefore deliver top and bottom line growth.

Speaker #6: First, on your M&A plans, Armin, you alluded to M&A as a potential accelerant to growth in the coming year. Can you share more detail on what we can look forward to and how much of an incremental growth driver this can be for you?

We're doing it in a very capital efficient way as we mentioned before by a joint venture with pain, which will provide us with more than $1 billion of funding and that's obviously a key enabler to accelerate.

In this area.

Speaker #6: And then also, you just mentioned distribution as a strategic focus area. And a potential driver of growth as early as 2026 as well. So can you expand on this a bit?

From a state perspective, we've been working very well with Bain as a partner and we're very pleased with the progress that we have been making.

So when you hear from US soon starting at <unk> 76 up but some of those acquisitions, which gives us confidence that we can accelerate growth. In addition to that up we think books had discussed before from.

Speaker #6: What changed about your strategy, if anything? And what gives you confidence that this can be a bigger contributor to growth in the coming year?

Speaker #6: Thanks.

From a distribution perspective.

Speaker #5: Well, thank you. So on the

Armin Zerza: Thank you. On the M&A side, we have a very strong pipeline in place, which, as I mentioned, we expect to start to materialize starting in calendar year 2026. As you probably know, we are focused on a few large opportunities where we, as a publisher, can add value in a way that creates value not just for artists and songwriters, but also in a way that delivers a strong return for us. The key focus simply is our catalog business or catalog businesses out there in the market. Why? Because they are highly equitative, and they also deliver top and bottom-line growth. We'll do this in a very capital-efficient way, as we mentioned before, via our joint venture with Bain Capital, which will provide us with more than $1 billion of funding. It's obviously a key enabler to accelerate growth in this area.

Speaker #5: M&A side, we have a very strong pipeline in place. Which, as I mentioned, we expect to start to materialize starting in calendar year '26.

The distribution is a significant part of our industry and very often a source of talent and in fact, we haven't talked much about this but.

Speaker #5: As you probably know, we are focused on a few large opportunities. Where we, as a publisher, can add value in a way that creates value not just for our artists and songwriters, but also in a way that delivers a strong return for us.

We actually have a large growing and profitable distribution business today and as we have announced before we have recently appointed a new leader with under 100, <unk>, who as you know has been leading our Latin America business for many years.

Speaker #5: The key focus simply is our catalog business, our catalog businesses out there in the market. Why? Because they are highly accretive, and they offer deliver top and bottom line growth.

And as you probably know this.

Business is heavily distributional coal of course to get under 100 and his team grew their business double digit and frankly at attractive margins for a long time now so really a current encourage by what he has done.

Speaker #5: We'll do this in a very capital-efficient way, as we mentioned before, by our joint venture with Bain, which will provide us with more than $1 billion of funding. It's obviously a key driver to accelerate growth in this area.

With his business and therefore, he is the perfect leader for distribution business.

I spent a lot of time with him to better understand what we need to win in this marketplace, what's that in Latin America, and the U S. But also globally and we have spent quite some time now.

Speaker #5: Now, from a status perspective, we've been working very well with Bain as a partner. And we are very pleased with the progress that we have been making.

Armin Zerza: Now, from a status perspective, we've been working very well with Bain as a partner, and we are very pleased with the progress that we've been making. We'll hear from us soon starting in calendar year 2026 about some of those acquisitions, which gives us confidence that this can accelerate growth in addition to the other building blocks I discussed before. From a distribution perspective, distribution is a significant part of our industry, and very often it's also new talent. In fact, we haven't talked too much about this, but we actually have a large, growing, and profitable distribution business today. As we have announced before, we have recently appointed a new leader with Alejandro, who, as you know, has been leading our Latin America business for many years.

Now, from a status perspective, we've been working very well with Bain as a partner, and we are very pleased with the progress that we've been making. We'll hear from us soon starting in calendar year 2026 about some of those acquisitions, which gives us confidence that this can accelerate growth in addition to the other building blocks I discussed before. From a distribution perspective, distribution is a significant part of our industry, and very often it's also new talent. In fact, we haven't talked too much about this, but we actually have a large, growing, and profitable distribution business today. As we have announced before, we have recently appointed a new leader with Alejandro, who, as you know, has been leading our Latin America business for many years.

The policies that allow us to provide better customer service on the one hand, but also to integrate clients faster and more efficiently.

Speaker #5: So you'll hear from us soon, starting in calendar 2026, about some of those acquisitions, which gives us confidence that this can accelerate growth in addition to the other building blocks I discussed before.

This business profitability. So we're now at a point, where we are really really confident that we can accelerate growth in this business.

Speaker #5: From a distribution perspective, look, distribution is a significant part of our industry. And very often, it's also a new talent. And in fact, we haven't talked too much about this, but we actually have a large growing and profitable distribution business today.

Particularly starting in 2006 now having said all of this you know as I talked before many times when looking at our business from a portfolio perspective.

So we're doing it in a way that across our business on the one hand, but also in houses margin.

Speaker #5: And as we have announced before, we have recently appointed a new leader with Alejandro, who, as you know, has been leading our Latin America business for many years.

So net both the strategy of really perfect 12 portfolio strategy to accelerate growth and have locked into that.

Okay.

Thank you I appreciate it.

Speaker #5: And as you probably know, this business is heavily distribution-focused, yet Alejandro and his team grew this business double-digit. And frankly, at attractive margins for a long time now.

Armin Zerza: As you probably know, this business is heavily distribution-focused, yet Alejandro and his team grew this business double-digit and, frankly, had attractive margins for a long time now. Really encouraged by what he has done with his business, and therefore he is the perfect leader for our distribution business. We have spent a lot of time with him to better understand what we need to win in this marketplace, not just in Latin America and here in the US, but also globally. We have spent quite some time now to build capabilities that allow us to provide better customer service on the one hand, but also to integrate clients faster and more efficiently so we can grow this business profitably. We're now at a point where we are really, really confident that we can accelerate growth on this business, particularly starting in 2026.

As you probably know, this business is heavily distribution-focused, yet Alejandro and his team grew this business double-digit and, frankly, had attractive margins for a long time now. Really encouraged by what he has done with his business, and therefore he is the perfect leader for our distribution business. We have spent a lot of time with him to better understand what we need to win in this marketplace, not just in Latin America and here in the US, but also globally. We have spent quite some time now to build capabilities that allow us to provide better customer service on the one hand, but also to integrate clients faster and more efficiently so we can grow this business profitably. We're now at a point where we are really, really confident that we can accelerate growth on this business, particularly starting in 2026.

The next question comes from Doug <unk> with TD Cowen Your line is open.

Hey, Thank you.

Robert I know one of your priorities has been to make sure their companies investing in the right technologies.

Speaker #5: So really a encouragement about what he has done. With his business and therefore he is the perfect leader for our distribution business. We have spent a lot of time with him to better understand what we need to win in this marketplace.

To position for future growth and I'm wondering if you could share some color on how those investments are contributing to the growth outlook you've laid out today and then also whether some of those priorities might be changing given the rapidly evolving landscape. Thank you.

Speaker #5: Not just in Latin America and in the US, but also globally. And we have spent quite some time now to build capabilities that allow us to provide better customer service on the one hand.

Sure. Thank you.

The priorities are not changing.

Speaker #5: But also to integrate clients faster and more efficiently, so we can grow this business profitably. So we're now at a point where we are really, really confident that we can accelerate growth in this business.

The same.

We're focused on.

As you think about our business, it's a large scale business with lots of Skus lots of albums lots of songs lots of artists.

Speaker #5: Particularly starting in 2026. Now, having said all of this, as I talked before many times, we're looking at our business from a portfolio planning perspective.

Armin Zerza: Now, having said all of this, as I talked before many times, we're looking at our business from a portfolio planning perspective. We'll do this in a way that grows our business on the one hand, but also enhances margin. In that, both the strategy are really perfect for our portfolio strategy to accelerate growth and enhance margin over time.

Now, having said all of this, as I talked before many times, we're looking at our business from a portfolio planning perspective. We'll do this in a way that grows our business on the one hand, but also enhances margin. In that, both the strategy are really perfect for our portfolio strategy to accelerate growth and enhance margin over time.

And they have to be managed across large number of DSP.

So we're in a high volume business and it requires infrastructure.

Speaker #5: So we'll do this in a way that grows our business on the one hand but also enhances margin. So, net, both strategies are really perfect for our portfolio strategy to accelerate growth and enhance margin over time.

Strong infrastructure that is scalable.

So we focused on that we strengthened our digital supply chain.

What are some other payments introduce more transparent accounting and publishing we stabilized and upgraded our core systems, which would include royalty processing and sync licensing systems and we're nearly fully alive with our financial transformation initiative, which unlocks a whole host of benefits.

Speaker #6: Thank you, appreciate

Speaker #6: Thank you, appreciate it. The next

[Analyst]: Thank you. Appreciate it.

Michael Morris: Thank you. Appreciate it.

Operator: The next question comes from Doug Kroetz with TD Cowen. Your line is open.

Speaker #1: question comes from Doug Krutz with TD Cowan. Your line is open.

Speaker #6: Hey, thank you. Robert, I know one of your priorities has been to make sure that companies investing in the right technologies. To position for future growth.

[Analyst]: Hey, thank you. Robert, I know one of your priorities has been to make sure that companies investing in the right technologies to position for future growth. I wondered if you could share some color on how those investments are contributing to the growth outlook you laid out today, and also whether some of those priorities might be changing given the rapidly evolving landscape. Thank you.

Doug Creutz: Hey, thank you. Robert, I know one of your priorities has been to make sure that companies investing in the right technologies to position for future growth. I wondered if you could share some color on how those investments are contributing to the growth outlook you laid out today, and also whether some of those priorities might be changing given the rapidly evolving landscape. Thank you.

A better and more insightful P&L.

More transparency part of Samsung matters et cetera.

Speaker #6: And I wondered if you could share some color on how those investments are contributing to the growth outlook you've laid out today. And then also, whether some of those priorities might be changing given the rapidly evolving landscape.

So we've really focused a lot on core infrastructure. So that we can accelerate the business and to handle the volume arm had mentioned.

Pipelines that we have.

Whether it's organic once or M&A.

Speaker #6: Thank you.

Speaker #7: Sure, thank you. Yeah, the priorities are not changing. They remain the same. We're focused on, as you think about our business, it's a large-scale business with lots of SKUs, lots of albums, lots of songs, lots of artists.

Robert Kyncl: Sure. Thank you. Yeah, the priorities are not changing. They remain the same. We're focused on, as you think about our business, it's a large-scale business with lots of SKUs, lots of albums, lots of songs, lots of artists, and they have to be managed across a large number of DSPs. We're in a high-volume business, and it requires infrastructure, solid, strong infrastructure that is scalable. We focused on that. We strengthened our digital supply chain, sped up our songwriter payments, introduced more transparent accounting. In publishing, we stabilized and upgraded our core systems, which would include royalty processing and sync licensing systems. We're nearly fully live with our financial transformation initiative, which unlocks a whole host of benefits and a better and more insightful P&L, more transparency for artists and songwriters, etc.

All of that requires infrastructure. So we've been focusing on that preparing the company for growth.

And that will continue and we've made a lot of progress in that area. So thats why we feel confident about our acceleration.

I just want to add to that.

Obviously this also helps us scale in many of our services globally.

Speaker #7: And they have to be managed across large numbers of DSPs. And so we're in a high-volume business. And it requires infrastructure. Solid and strong infrastructure that is scalable.

Key enablers for the cost savings program.

Excellent cost loss.

Speaker #7: And so we focused on that. We strengthened our digital supply chain. We sped up our songwriter payments and introduced more transparent accounting. And publishing, we stabilized and upgraded our core systems, which would include royalty processing and sync licensing systems.

Okay.

The next question comes from Kamran Manson Teran with Morgan Stanley. Your line is open.

Thank you and good morning.

Speaker #7: And we're nearly fully live with our financial transformation initiative, which unlocks a whole host of benefits and a better and more insightful P&L. More transparency for artists and songwriters, etc.

You highlighted having deals with four of the top five DSP and having secured kind of wholesale rate increases across all of those platforms I'm wondering Robert you've talked in the past about kind of the benefits of variability in licensing terms across platform partners and that being.

Speaker #7: So we've really focused a lot on core infrastructure so that we can accelerate the business and handle the volume. Armin mentioned the deal pipelines that we have, whether it's organic ones or M&A.

Robert Kyncl: We've really focused a lot on core infrastructure so that we can accelerate the business and handle the volume. Armin mentioned the deal pipelines that we have, whether it's organic ones or M&A, all of that requires infrastructure. We've been focusing on that, preparing the company for growth, and that will continue. We've made a lot of progress in that area. That's why we feel confident about our acceleration.

We've really focused a lot on core infrastructure so that we can accelerate the business and handle the volume. Armin mentioned the deal pipelines that we have, whether it's organic ones or M&A, all of that requires infrastructure. We've been focusing on that, preparing the company for growth, and that will continue. We've made a lot of progress in that area. That's why we feel confident about our acceleration.

Positive with regard to facilitating experimentation.

Is that still would you say that's still the case across the new platforms that you've locked in deals with or have we reached kind of more of a standardized.

Speaker #7: All of that requires infrastructure. So we've been focusing on that, preparing the company for growth. And that will continue. And we've made a lot of progress in that area.

Speaker #7: So that's why we feel confident about our acceleration.

That type of deal structure at this point in time. Thanks, sorry can I just clarify your question or you thought you were talking about existing dsp's on new platform.

Speaker #5: I just want to add to that. Obviously, this also helps us scale many of our services globally. So the key enabler also for the cost savings program we're implementing that we discussed last time.

Armin Zerza: I just want to add to that. Obviously, this also helps us scale many of our services globally. It is a key enabler also for the cost savings program we're implementing that we discussed last time.

Okay.

Just in the core of the five larger existing ones.

Great.

My question is on <unk>.

Sorry, I couldn't really fully understand the question.

Speaker #6: Thanks.

I'm really just trying to.

Speaker #1: The next question comes from Cameron Menson Perrone with Morgan Stanley. Your line is

Operator: The next question comes from Cameron Menson-Perron with Morgan Stanley. Your line is open.

Yeah, It really just trying to clarify.

Past, you've talked about the benefits of having kind of variation in your DSP deals I'm wondering if that's still the case.

Speaker #1: open.

Speaker #8: Thank you, and good

[Analyst]: Thank you and good morning. You highlighted having deals with four of the top five DSPs and having secured kind of wholesale rate increases across all of those platforms. I'm wondering, Robert, you've talked in the past about kind of the benefits of variability in licensing terms across platform partners, and that being a positive with regard to facilitating experimentation. Would you say that's still the case across the new platforms that you've locked in deals with, or have we reached kind of more of a standardized type of deal structure at this point in time? Thanks.

Cameron Mansson-Perrone: Thank you and good morning. You highlighted having deals with four of the top five DSPs and having secured kind of wholesale rate increases across all of those platforms. I'm wondering, Robert, you've talked in the past about kind of the benefits of variability in licensing terms across platform partners, and that being a positive with regard to facilitating experimentation. Would you say that's still the case across the new platforms that you've locked in deals with, or have we reached kind of more of a standardized type of deal structure at this point in time? Thanks.

Speaker #8: morning. You highlighted having deals with four of the top five DSPs and having secured kind of wholesale rate increases across all of those platforms.

Or if there is more standardization kind of in conjunction with locking in wholesale rate increase.

Thank you sorry, thank you for the clarification.

Speaker #8: I'm wondering, Robert, you've talked in the past about kind of the benefits of variability in licensing terms across platform partners and that being a positive with regard to facilitating experimentation.

Look we generally when you begin.

Different partners, which have different objectives and you strike.

Slightly different deals.

As time goes by businesses grow things standardize more so do the deal terms, obviously have different platforms are slightly different.

Speaker #8: Is that still, would you say that's still the case across the new platforms that you've locked in deals with, or have we reached kind of more of a standardized type of deal structure at this point in time?

Pre funnels, some don't et cetera, so what that kind of.

Variability.

However.

We strive for a fair.

Speaker #7: Sorry, can I just clarify a question? You were talking about existing DSPs or new platforms?

Robert Kyncl: Sorry, can I just clarify a question? You were talking about existing DSPs or new platforms?

Our marketplace.

Where people are where our partner in Spain at the same prices for the content that we license to them. So consistency is very important for us and making sure that no partner feel disadvantaged versus another one and then we have a very healthy competition.

Speaker #8: The existing, the four of the five larger existing ones.

[Analyst]: The four of the five larger existing ones.

Cameron Mansson-Perrone: The four of the five larger existing ones.

Speaker #7: Right, and the question is on, sorry, I couldn't really fully understand the question.

Robert Kyncl: Right. The question is on—sorry, I couldn't really fully understand the question.

On on fair and square term. So there is a much more standardization in place and it wasn't in the past.

Speaker #8: I really just trying to, yeah, really just trying to clarify. In the past, you've talked about the benefits of having kind of variation in your DSP deals. I'm wondering if that's still the case or if there is more standardization, kind of in conjunction with locking in wholesale rate increases.

[Analyst]: I was just trying to—yeah, really just trying to clarify. In the past, you've talked about the benefits of having kind of variation in your DSP deals. I'm wondering if that's still the case or if there is more standardization, kind of in conjunction with locking in wholesale rate increases.

Cameron Mansson-Perrone: I was just trying to—yeah, really just trying to clarify. In the past, you've talked about the benefits of having kind of variation in your DSP deals. I'm wondering if that's still the case or if there is more standardization, kind of in conjunction with locking in wholesale rate increases.

Yeah.

Got it and then if I could follow up.

On the market share gains that you've had and been able to deliver on this year, how do you think.

With regard to the savings initiatives like how do you balance the two.

Speaker #7: Oh, got it. Thank you for the clarification. Look, we generally, when you begin, you have different partners. We show different objectives, and you strike slightly different deals.

Robert Kyncl: Got it. Thank you. Thank you for the clarification. Look, generally, when you begin, you have different partners which have different objectives, and you strike slightly different deals. As time goes by, businesses grow, things standardize more, and so do the deal terms. Obviously, different platforms are slightly different. Some have free funnels, some do not, etc. That kind of variability. However, we strive for a fair marketplace where our partners pay the same prices for the content that we license to them. Consistency is very important for us, and making sure that no partner feels disadvantaged versus another one, and that we have very healthy competition on fair and square terms. There is much more standardization in place than there was in the past.

In terms of trying to deliver on your savings initiatives.

And reinvesting to continue to drive market share gains in the future. Thanks, Yes, maybe I can take that.

Speaker #7: As time goes by, businesses grow. Things standardize more. And so do the deal terms. Obviously, different platforms are slightly different. Some have free funnels, some don't, etc.

We're very focused on ensuring that we actually invest more.

In our core replica markets in key genres as well as in the most promising projects.

Speaker #7: So that kind of variability however, we strive for a fair marketplace. Where people, where our partners pay the same prices for the content that we license to them.

So from a savings perspective, we are not cutting spending on the front line as we call. It so we actually increasing in our investments the savings are mostly reflective of us becoming more efficient on the back office side.

Speaker #7: So consistency is very important for us. And making sure that no partner feels disadvantaged versus another one. And that we have a very healthy competition on fair and square terms.

<unk> mentioned technology as a key enabler. So I'll give you a few example in finance we have just introduced S&P.

And we're obviously dealing with millions of transactions, we feel enabled us to become more efficient as a finance organization.

Speaker #7: So there's much more standardization in place than it was in the past.

In marketing as we kind of organize our data, we're leveraging more and more of the standard datasets, we have to drive marketing efficiencies on deal, making and then we'll go into.

Speaker #8: Got it. And then if I could follow up, on the market share gains that you've had and been able to deliver on this year, how do you think with regard to the savings initiatives, how do you balance those two in terms of trying to deliver on your savings initiatives and reinvesting to continue to drive market share gains in the future?

[Analyst]: Got it. If I could follow up on the market share gains that you've had and been able to deliver on this year, how do you think with regard to the savings initiatives? How do you balance those two in terms of trying to deliver on your savings initiatives and reinvesting to continue to drive market share gains in the future? Thanks.

Cameron Mansson-Perrone: Got it. If I could follow up on the market share gains that you've had and been able to deliver on this year, how do you think with regard to the savings initiatives? How do you balance those two in terms of trying to deliver on your savings initiatives and reinvesting to continue to drive market share gains in the future? Thanks.

Producing AI, we actually have introduced their middle office globally working within the company to help us optimize our dealmaking, so thinking about the savings really coming from becoming more operationally efficient as a company and back office savings, which we leveraged to invest more in the most promising markets more in the most promising to us.

Speaker #8: Thanks.

Speaker #7: Yeah, maybe I

Armin Zerza: Yeah, maybe I can take that. We are very focused on ensuring that we actually invest more in our core repertoire markets and key genres, as well as in the most promising projects. From a savings perspective, we are not cutting our spending on the front line, as we call it. We're actually increasing in our investments. The savings are mostly reflective of us becoming more efficient on the back office side. Robert mentioned technology as a key enabler. I'll give you a few examples. In finance, we have just introduced SAP, and we're obviously dealing with millions of transactions. This will enable us to become more efficient as a finance organization. In marketing, as we kind of organize our data, we're leveraging more and more the standard data sets we have to drive marketing efficiencies. On deal-making, we're now introducing AI.

Speaker #7: can take that. We are very focused on ensuring that we actually invest more in our core repertoire markets and key genres. As well as in the most promising projects.

And more in the most promising Jarvis and Thats really helped me better.

Got it that's helpful. Thank you.

The next question comes from Ian Moore with Bernstein. Your line is open.

Speaker #7: So from a savings perspective, we are not cutting our spending on the front line as we call it. So we actually increasing in our investments.

Alright. Thank you so looking through the AI licensing announcements that have come out in the past couple of weeks.

Speaker #7: The savings are mostly reflective of us becoming more efficient on the back office side. Robert mentioned technology as a key enabler. So I'll give you a few examples.

Like these are the services kind of.

Two different very different parts of the value chain.

Speaker #7: In finance, we have just introduced SAP. And we're obviously dealing with millions of transactions. This will enable us to become more efficient as a finance organization.

<unk> got some professional grade production tools in there some more like listening discovery platforms. I was wondering how you could if you could maybe bucket the commercial opportunity.

Speaker #7: In marketing, as we kind of organize our data, we're leveraging more and more the standard data set we have to drive marketing efficiencies. On deal making, we're now introducing AI.

See across like the spectrum of of.

Of new services that you're licensing too.

Speaker #7: We actually have introduced a deal office globally and working with an AI company to help us optimize our deal making. So think about the savings really coming from becoming more operationally efficient as a company and back office savings.

Armin Zerza: We actually have introduced a deal office globally and are working with an AI company to help us optimize our deal-making. Think about the savings really coming from becoming more operationally efficient as a company, and back office savings, which we leverage to invest more in the most promising markets, more in the most promising artists, and more in the most promising genres. That's really how we balance this.

We actually have introduced a deal office globally and are working with an AI company to help us optimize our deal-making. Think about the savings really coming from becoming more operationally efficient as a company, and back office savings, which we leverage to invest more in the most promising markets, more in the most promising artists, and more in the most promising genres. That's really how we balance this.

Thank you sure.

So first.

I'd like to say it's.

<unk>.

It's a very.

Energizing moment.

In the industry when you see so many new companies popping up attracting venture capital.

Speaker #7: Which we leverage to invest more in the most promising markets. More in the most promising artists. And more in the most promising genres. And that's really how we balance

We have not had this in the last 10.

10 to 15 years.

Speaker #7: this. Got it.

All of the players that have been established in the first decade really and now there is a crop of new companies, new investment new excitement and new talent just tremendous momentum.

[Analyst]: Got it. That's helpful. Thank you.

Cameron Mansson-Perrone: Got it. That's helpful. Thank you.

Speaker #8: That's helpful. Thank

Speaker #8: you. The next

Operator: The next question comes from Ian Moore with Bernstein. Your line is open.

Speaker #1: Question comes from Ian Moore with Bernstein. Your line is open.

So we decided that we're going to seize this opportunity we're not going to be a passenger we're going to be the driver because it is important to get an early set of terms and define the future for us rather than let other people define that for us that means that this will cut across all the different segments that you highlighted there may.

Speaker #9: Hi, thank you. So looking through the AI licensing announcements, that have come out in the past couple of weeks, looks like these services kind of point to different very different parts of the value chain.

[Analyst]: Thank you. Looking through the AI licensing announcements that have come out in the past couple of weeks, it looks like these services kind of point to very different parts of the value chain. You got some professional-grade production tools in there, some more like listening discovery platforms. I was wondering if you could maybe bucket the commercial opportunity you see across the spectrum of new services that you're licensing to. Thank you.

Ian Moore: Thank you. Looking through the AI licensing announcements that have come out in the past couple of weeks, it looks like these services kind of point to very different parts of the value chain. You got some professional-grade production tools in there, some more like listening discovery platforms. I was wondering if you could maybe bucket the commercial opportunity you see across the spectrum of new services that you're licensing to. Thank you.

Speaker #9: You got some professional-grade production tools in there, some more like listening discovery platforms. I was wondering how you could, if you could maybe bucket the commercial opportunity you see across the spectrum of new services that you're licensing to.

Professional and content there may be user content.

There is all kinds of consumption creation.

It's certainly a lot of work for our teams, but it's so it's very exciting and energizing and the opportunity that we see as one of interactivity interactivity is something that drives value has been proven over and over whether it's in the video gaming industry, even going to a concert is interactive.

Speaker #9: Thank you.

Speaker #7: Sure. So first, I'd like to say it's a very energizing moment in the industry. When you see so many new companies popping up, attracting venture capital.

Robert Kyncl: Sure. First, I'd like to say it's a very energizing moment in the industry when you see so many new companies popping up, attracting venture capital. We have not had this in the last 10 to 15 years, all of the players that have been established in the first decade, really. Now there's a crop of new companies, new investment, new excitement, new talent, just tremendous momentum. We decided that we are going to seize this opportunity. We're not going to be a passenger. We're going to be the driver because it is important to get in early, set the terms, and define the future for us rather than let other people define it for us. That means that this will cut across all the different segments that you highlighted. There may be professional content. There may be user content. There's all kinds of consumption, creation.

Sure. First, I'd like to say it's a very energizing moment in the industry when you see so many new companies popping up, attracting venture capital. We have not had this in the last 10 to 15 years, all of the players that have been established in the first decade, really. Now there's a crop of new companies, new investment, new excitement, new talent, just tremendous momentum. We decided that we are going to seize this opportunity. We're not going to be a passenger. We're going to be the driver because it is important to get in early, set the terms, and define the future for us rather than let other people define it for us. That means that this will cut across all the different segments that you highlighted. There may be professional content. There may be user content. There's all kinds of consumption, creation.

Revenue per hour is always higher when somebody is looking at something with their eyes and using their fingers and their hands to create something so the value gets created.

Speaker #7: We have not had this in the last 10 to 15 years. All of the players that have been established in the first decade, really.

And we'll capture it and what.

What happens is also that.

Uh huh.

Speaker #7: And now there's a crop of new companies. New investment. New excitement. New talent. Just tremendous momentum. So we decided that we are going to seize this opportunity.

There is a very very high correlation between interactivity and iconic familiarity thrives on it.

I mean, it means that stars will get bigger and that will be it will benefit from this trend and that iconic IP will benefit from this trend. So we're focusing on all of the elements here and we want to make sure of that.

Speaker #7: We're not going to be a passenger. We're going to be the driver. Because it is important to get in early. Set the terms. And define the future for us rather than let other people define it for us.

Speaker #7: That means that this will cut across all the different segments that you highlighted. There may be professional content. There may be user content. There's all kinds of consumption, creation, it's certainly a lot of work for our teams, but it's very exciting and energizing.

We capture this incremental an expansive opportunity.

I think of it a bit more light user generated content early on Youtube.

That started and it was seen as a threat and in fact, it has actually developed and something that was very very positive and commercially.

Robert Kyncl: It's certainly a lot of work for our teams, but it's very exciting and energizing. The opportunity that we see is one of interactivity. Interactivity is something that drives value. It's been proven over and over, whether it's in the video gaming industry, even going to a concert is interactive. The revenue per hour is always higher when somebody is looking at something with their eyes and using their fingers and their hands to create something. The value gets created and we'll capture it. What happens is also that there's a very, very high correlation between interactivity and iconic familiarity. It thrives on it. What does that mean? It means that stars will get bigger, they'll benefit from this trend, and that iconic IP will benefit from this trend.

It's certainly a lot of work for our teams, but it's very exciting and energizing. The opportunity that we see is one of interactivity. Interactivity is something that drives value. It's been proven over and over, whether it's in the video gaming industry, even going to a concert is interactive. The revenue per hour is always higher when somebody is looking at something with their eyes and using their fingers and their hands to create something. The value gets created and we'll capture it. What happens is also that there's a very, very high correlation between interactivity and iconic familiarity. It thrives on it. What does that mean? It means that stars will get bigger, they'll benefit from this trend, and that iconic IP will benefit from this trend.

Speaker #7: And the opportunity that we see is one of interactivity. Interactivity is something that drives value. It's been proven over and over, whether it's in the video gaming industry, even going to a concert is interactive.

For all parties involved so we're very excited about this.

We're open for business.

Thank you.

Your next question comes from Kannan Venkat with Barclays. Your line is open.

Speaker #7: The revenue per hour is always higher. When somebody is looking at something with their eyes and using their fingers, and their hands create something.

Thank you.

Robert maybe just wondering.

I'm wondering on that point, and maybe theres any a little bit of a push back to see what youre the ads b.

Speaker #7: So the value gets created. And we'll capture it. And what happens is also that there's a very, very high correlation between interactivity and iconic familiarity.

Why isn't he.

Okay.

When equal measure.

Given that you know.

Obviously your content can be used in other legal content can be used to create new forms of content or at least the models can be dream donut.

Speaker #7: It thrives on it. What does that mean? It means that stars will get bigger, and that will benefit from this trend. And that iconic IP will benefit from this trend.

And over the longer time horizon that could completely bypass.

Speaker #7: So we're focusing on all of the elements here, and we want to make sure that we capture this incremental and expansive opportunity. I think of it a bit more like user-generated content, early on YouTube.

Robert Kyncl: We're focusing on all of the elements here, and we want to make sure that we capture this incremental and expansive opportunity. I think of it a bit more like user-generated content early on on YouTube that started and it was seen as a threat. In fact, it has actually developed in something that was very, very positive and commercially successful for all parties involved. We're very excited about this, and we're open for business.

We're focusing on all of the elements here, and we want to make sure that we capture this incremental and expansive opportunity. I think of it a bit more like user-generated content early on on YouTube that started and it was seen as a threat. In fact, it has actually developed in something that was very, very positive and commercially successful for all parties involved. We're very excited about this, and we're open for business.

Content creators edit again, that's obviously a big debate so would love to get your reaction.

On that and.

And then the financials, let me if you look at the guidance for next year in terms of margin expansion.

Speaker #7: That started, and it was seen as a threat; in fact, it has actually developed into something that was very, very positive and commercially successful for all parties involved.

I think the growth in EBITDA, that's implied by that is roughly equal to or you know.

Most of the growth seems to be coming from the cost cuts.

Speaker #7: So we're very excited about this. And we're open for business.

And so in terms of operating leverage.

Would be great to understand them and be.

Speaker #8: Thank

[Analyst]: Thank you.

Ian Moore: Thank you.

Speaker #8: you. Your next

Underlying trends, excluding things like M&A and put it in sort of cost savings.

Operator: Your next question comes from Kinan Venkat with Barclays. Your line is open.

Speaker #1: Question comes from Kanaan Venkat with Barclays. Your line is open.

Things are trending.

If you could just get some more detail that would be helpful. Thank you.

Sounds good I'll take the first part on R&M will take the second.

Speaker #9: Thank you. Robert, maybe just following up on that point and maybe presenting a little bit of a pushback to see what your reaction would be.

[Analyst]: Thank you. Robert, maybe just following up on that point and maybe presenting a little bit of a pushback to see what your reaction would be. Why isn't AI a threat to an equal measure given that obviously your content can be used, yours and other label content can be used to create new forms of content, or at least the models can be trained on it? Over the longer time horizon, that could completely bypass content creators theoretically. That's obviously a big debate. I would love to get your reaction on that. More on the financials, I mean, if you look at the guidance for next year in terms of margin expansion, I think the growth and EBITDA that's implied by that is roughly equal to, or most of the growth seems to be coming from the cost cuts.

Kannan Venkat: Thank you. Robert, maybe just following up on that point and maybe presenting a little bit of a pushback to see what your reaction would be. Why isn't AI a threat to an equal measure given that obviously your content can be used, yours and other label content can be used to create new forms of content, or at least the models can be trained on it? Over the longer time horizon, that could completely bypass content creators theoretically. That's obviously a big debate. I would love to get your reaction on that. More on the financials, I mean, if you look at the guidance for next year in terms of margin expansion, I think the growth and EBITDA that's implied by that is roughly equal to, or most of the growth seems to be coming from the cost cuts.

So of course with every change every technology technology.

Technology change.

Speaker #9: But why isn't AI a threat to an equal measure? Given that obviously your content can be used, yours and other legal content can be used to create new forms of content or at least the models can be trained on it.

A threat and an opportunity.

Democratization of distribution was a threat.

Everybody was predicting our demise and sides.

Sidestepping.

Major music companies and.

Obviously, the opposite has proven to be true over time.

Speaker #9: And over the longer time horizon, that could completely bypass content creators theoretically. And that's obviously a big debate. So I would love to get your reaction on that.

We believe the same happens here of course, we look at the threat that this could pose in terms of dilution et cetera, but at the same time, we need to focus on how do we actually.

Speaker #9: And then more on the financials. I mean, if you look at the guidance for next year in terms of margin expansion, I think the growth in EBITDA that's implied by that is roughly equal to, or most of the growth seems to be coming from the cost cuts.

Turn this into an advantage for all of us and drive the value of the industry and the value that we provide.

Also important to know that.

And I've said this many times before.

The value of the largest music companies and the contribution that we have to the industry is rising not declining with all of these challenges. This is becoming a much more of a big business to big business.

Speaker #9: And so in terms of operating leverage, would be great to understand. I mean, the underlying trends excluding things like M&A, for instance, or cost savings, how you guys are trending.

[Analyst]: In terms of operating leverage, it would be great to understand, I mean, the underlying trends, excluding things like M&A, for instance, or cost savings, how you guys are trending. If you could just get some more details, that would be helpful. Thank you.

In terms of operating leverage, it would be great to understand, I mean, the underlying trends, excluding things like M&A, for instance, or cost savings, how you guys are trending. If you could just get some more details, that would be helpful. Thank you.

Speaker #9: If you could just get some more details, that would be helpful. Thank you.

Interaction it is very hard for individual creators deal with large technology company that is much better for these matters to be handled by large music companies large companies.

Speaker #7: Sounds good. I'll take the first part and Armin will take the second. So of course, with every change, every technology change, there's always a threat and an opportunity.

Robert Kyncl: Sounds good. I'll take the first part, and Armin will take the second. Of course, with every change, every technology change, there's always a threat and an opportunity. The market decision of distribution was a threat. Everybody was predicting our demise and sidestepping the major music companies. Obviously, the opposite has proven to be true over time. We believe the same happens here. Of course, we look at the threat that this could pose in terms of dilution, etc. At the same time, we need to focus on how do we actually turn this into an advantage for all of us, and drive the value of the industry and the value that we provide.

Have the capabilities and Knowhow to technology the scale.

Speaker #7: The market position of distribution was a threat. Everybody was predicting our demise. And sidestepping the major music companies. And obviously, the opposite has proven to be true over time.

To ensure the right outcomes. So we view this as this is all roll. This all role is to shape the industry.

And make sure that had benefits artisans long letters as well as us and our shareholders.

Speaker #7: And we believe the same happens here. Of course, we look at the threat that this could pose in terms of dilution, etc. But at the same time, we need to focus on how we actually turn this into an advantage for all of us and drive the value of the industry.

Alright.

On the margin I think it's important to note that.

Our guide.

Is of course after investment.

We are making to the business, it's really a net margin guide.

The guide is also mostly focused on two areas. One is the cost savings program that we delivered in two weeks the organic margin growth that we planned to deliver and there's really three drivers that will help us do that.

Speaker #7: And the value that we provide. It's also important to know that, and I've said this many times before, the value of the large music companies and the contribution that we have to the industry is rising, not declining.

Robert Kyncl: It's also important to know that, and I've said this many times before, the value of the large music companies and the contribution that we have to the industry is rising, not declining. With all of these challenges, this is becoming much more of a big business to big business interaction. It is very hard for individual creators to deal with large technology companies. It is much better for these matters to be handled by large music companies, large IP companies who have the capabilities, the know-how, the technology, and the scale to ensure the right outcomes. We view this as our role. Our role is to shape the industry and make sure that it benefits artists, songwriters, us, and our shareholders. Armin?

It's also important to know that, and I've said this many times before, the value of the large music companies and the contribution that we have to the industry is rising, not declining. With all of these challenges, this is becoming much more of a big business to big business interaction. It is very hard for individual creators to deal with large technology companies. It is much better for these matters to be handled by large music companies, large IP companies who have the capabilities, the know-how, the technology, and the scale to ensure the right outcomes. We view this as our role. Our role is to shape the industry and make sure that it benefits artists, songwriters, us, and our shareholders. Armin?

One is as we start to accelerate.

Framing business that has a higher margin business. This is actually be driving margin growth already for us.

Speaker #7: With all of these challenges, this is becoming a much more of a big business-to-big business interaction. It is very hard for individual creators to deal with large technology companies.

Two.

He is and price increases will flow to the bottom line and will help us improve margin and three to a certain area.

Speaker #7: It is much better for these matters to be handled by large music companies, large IT companies who have the capabilities and know-how for technology to scale to ensure the right outcomes.

So think about this as a net margin guide.

But the biggest organic drivers for us would be one streaming growth in too.

The PSM price increases.

Speaker #7: So we view this as our role. This is our role to shape the industry and make sure that it benefits artists and songwriters.

Thank you.

Yeah.

That is all the time, we have for questions I will turn the call to Robert Kintzel for closing remarks.

Speaker #7: As well as us and our shareholders. Armin?

Yeah.

So thank you. Thank you for your attention today.

Speaker #3: Yeah, on the margin, I think it's important to note that our guide is, of course, after investments we make into the business. It's really a net margin guide.

Armin Zerza: Yeah, on the margin, I think it's important to note that our guide is, of course, after investments we make into the business. It's really a net margin guide. The guide is also mostly focused on two areas. One is the cost savings program that we deliver, and two is the organic margin growth that we plan to deliver. There's really three drivers that will help us do that. One is, as we start to accelerate our streaming business, that is a higher margin business that is actually driving margin growth already for us. Two, BSM price increases will go to the bottom line, and will help us improve margin. Three, there are certain inorganic areas. Think about this as a net margin guide. The biggest organic drivers for us will be one, streaming growth, and two, the BSM price increases that we'll see.

I just want to reiterate that.

It is evident from our results that our strategy is working that's how labor of quite a few years of work both on the technology front.

Speaker #3: The guide is also mostly focused on two areas. One is the cost savings program that we deliver and who is the organic margin growth that we plan to deliver.

On the investment front on artist Development administration, it's really all divisions of the company.

Been firing on all cylinders and it's great to see it all come together through a sustained growth market share expansion.

Speaker #3: And there's really three drivers that will help us do that. One is, as we start to accelerate our streaming business, that is a higher margin business that is actually driving margin growth already for us.

And on top of it now is accelerating and seizing the opportunity to shape, the future and to create new incremental business that will be set up the right way for the future to capture the right possibilities, both creative and economic for artists and songwriters and our shareholders.

Speaker #3: Two, PSM price increases will flow to the bottom line and will help us improve margin. And three, there are certain inner value areas. So think about this as a net margin guide.

Speaker #3: But the biggest organic drivers for us will be one, streaming growth, and two, the PSM price increases that we'll see.

Thank you so much for being here.

Talk to you in 90 days.

This concludes today's conference call. Thank you for joining you may now disconnect.

Speaker #9: Thank

[Analyst]: Thank you.

Kannan Venkat: Thank you.

Speaker #9: you. That is all the time we have

Operator: That is all the time we have for questions. I will turn the call to Robert Kyncl for closing remarks.

Speaker #1: For questions, I will turn the call over to Robert Kyncl for closing remarks.

Speaker #7: So thank you, thank you for your attention today. I just want to reiterate that it's evident from our results that our strategy is working.

Robert Kyncl: Thank you for your attention today. I just want to reiterate that it's evident from our results that our strategy is working. It's a labor of quite a few years of work, both on the technology front, on the investment front, on artist development, administration. Really, all divisions at the company have been firing on all cylinders. It's great to see it all come together through sustained growth, market share expansion. On top of it now, us accelerating and seizing the opportunity to shape the AI future and create new incremental business that will be set up the right way for the future to capture the right possibilities, both creative and economic, for artists, songwriters, and our shareholders. Thank you so much for being here. Talk to you in 90 days.

Speaker #7: It's all labor of quite a few years of work, both on the technology front, on the investment front, on artist development, administration. It's really all divisions at the company have been firing on all cylinders.

Speaker #7: And it's great to see it all come together through sustained growth and market share expansion. On top of that, now we are accelerating and seizing the opportunity to shape the AI future and create new incremental business that will be set up the right way for the future, capturing the right possibilities, both creative and economic, for artists, songwriters, and our shareholders.

Speaker #7: Thank you so much for being here. Talk to you in 90 days.

Speaker #1: This concludes today's conference call. Thank you for joining. You may now

Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.

Speaker #1: disconnect. I

Speaker #10: I checked the doors, checked the windows, and pulled the blinds. I checked the clock, wondering what he'll pull this time. I have a feeling that Necromancer's outside, and I'm just trying to stay

[Analyst]: I check the dark, check the windows, and pull the blinds. I check the clock, wondering what he'll pull this time. I have a feeling that now grown man's upset, and I'm just trying to stay quiet. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School from the second contract. I used to kick. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School of my family's generation. I used to.

I check the dark, check the windows, and pull the blinds. I check the clock, wondering what he'll pull this time. I have a feeling that now grown man's upset, and I'm just trying to stay quiet. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School from the second contract. I used to kick. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School of my family's generation. I used to.

Speaker #10: quiet. I don't

Speaker #11: sleep much, that's crazy. How'd you know that? Keep myself up, that's maybe. How'd you know that? Ooh, promises, and contracts. I used to keep, I don't sleep much, that's crazy.

Speaker #11: How'd you know that? Keep myself up, that's maybe. How'd you know that? Ooh, lost sensation. I used to keep, wake up and find out it'll change up.

[Analyst]: Wake up and I find out that it changed up. Wake up, did it change up? Is it light out yet? Better find out, better walk around the edge of the room in the bed where the eye more stays. Face around, better try to breathe. Face around, face around.

Wake up and I find out that it changed up. Wake up, did it change up? Is it light out yet? Better find out, better walk around the edge of the room in the bed where the eye more stays. Face around, better try to breathe. Face around, face around.

Speaker #11: Wait, did it change up? Is it light up? Yeah, did it find out better? Better walk around the edge of the room in the bed where the hum all fades.

Speaker #11: Face around, better try to breathe. Face around, face

Speaker #11: around.

Speaker #10: I checked

[Analyst]: I check the dark, check the windows, and pull the blinds. I check the clock, wondering what he'll pull this time. I have a feeling that net grown man's upset, and I'm just trying to stay quiet. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School from the second contract. I used to kick. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School of my family's generation. I used to think. I used to think. School, I won't get out there, but I will try. School, I won't get out there, but I will try.

I check the dark, check the windows, and pull the blinds. I check the clock, wondering what he'll pull this time. I have a feeling that net grown man's upset, and I'm just trying to stay quiet. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School from the second contract. I used to kick. I don't think much, that's crazy. How'd you know that? Get myself up, that's maybe. How'd you know that? School of my family's generation. I used to think. I used to think. School, I won't get out there, but I will try. School, I won't get out there, but I will try.

Speaker #10: the doors, checked the windows, and pulled the blinds. I checked the clock, wondering what he'll pull this time. I have a feeling that Necromancer's outside, and I'm just trying to stay quiet.

Speaker #11: I don't sleep much, that's crazy. How'd you know that? Keep myself up, that's maybe. How'd you know that? Ooh, promises, and contracts. I used to keep, I don't sleep much, that's crazy.

Speaker #11: How'd you know that? Keep myself up, that's maybe. How'd you know that? Ooh, lost sensation. I used to keep, I used to keep. Ooh, I'll get up and I'll try.

Speaker #11: Ooh, I'll get up and I'll try.

[Analyst]: I check the clock, wondering what he'll pull this time. I have a feeling that net grown man's upset, and I'm just trying to stay quiet.

I check the clock, wondering what he'll pull this time. I have a feeling that net grown man's upset, and I'm just trying to stay quiet.

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