Warner Music Group Corp.

Welcome to Warner Music Group's third quarter earnings call for the period ended June 30, 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. I would now like to turn the call over to your host, Mr. Kareem Chin, Head of Investor Relations. You may begin.

Good morning, everyone, and welcome to Warner Music Group's fiscal third quarter earnings conference call. Please note that our earnings press release, earnings snapshot, and form 10-Q are available on our website. On today's call, we have our CEO, Robert Kinsel, and our CFO, Armin Zerza, who will take you through our results, and then we will answer your questions. Before our prepared remarks, I'd 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. Also, please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted. All forward-looking 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 can 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.

Thanks, Karim, and hello, everyone. Before I get into our results, I'd like to formally welcome our new CFO, Armin Serza, who joins us for his first earnings call. I look forward to partnering with him as we elevate W&G to new heights. I'm pleased to say that we've delivered a strong quarter marked by re-acceleration of growth. This was driven by a sustained and impressive showing on the charts, which is now also beginning to translate into an improvement in our global market share. all of which underscores that our strategy is working. I'll give you a brief summary of our results, and Armen will provide more detail. We saw a broad-based reacceleration with total revenue growth of 7%, reflecting growth across recorded music and music publishing. Recorded music subscription streaming grew 8.5%, adjusted for notable items. As I've mentioned to you before, We're creating a virtuous cycle by putting more money behind the music while simultaneously becoming leaner and stronger. Our tighter focus is helping fuel our progress in three strategic priorities. Growing our market share, growing the value of music, and increasing our efficiency. I am pleased to say that we have tangible proof points in each area. I'll start with growing our share. During the quarter, we've grown our recorded music market share in key regions, including the U.S., where our market share increased roughly one percentage point year over year per Luminate data. We're achieving these gains by delivering the biggest hits in the world today, developing artists who will be the superstars of tomorrow, and growing the popularity of our iconic catalog. Our recording artists held half of the top 10 on the Spotify global chart for 12 weeks and the number one spot for all but seven weeks of 2025. And right now we have seven of the top 20 spots on Billboard Global 200. We're also seeing great success from our breakout artists in an increasingly noisy and competitive environment. These new stars will highlight WMG's outstanding artist development capabilities. Atlantic's Alex Warren has held the number one spot on Billboard Hot 100 for nine weeks, and his album debuted at number one in the UK, while Warner Records' Somber reached number one on the Spotify global chart. Teddy Swims, Benson Boone, and Rosé have all remained fixtures on the charts, showing the incredible staying power of the songs that captivate fans. That is, Loose Control, released just over two years ago, has become the first song in the history of the Billboard Hot 100 to spend 100 weeks on the chart and still counting. Outside the United States, we've had number ones from Nikki Savage in Italy, Gabs in Denmark, Fidel Chaker in Mina, and Eurovision Song Contest winner JJ in Austria, among others. This is also representative of the progress we've seen on expanding our international market share. Warner Chappell continued its strong run as well, with Morgan Whalen's I'm the Problem holding the number one spot on the Billboard 200 album chart for nine weeks, Riley Greene hitting number one on Billboard country airplay chart, and Blackpink's Diplo-produced track Jump debuting atop Billboard Global 200. Today's hits will become the evergreen catalog of the future. Given that music over three years old represents roughly two-thirds of our recorded music streaming revenue, continued growth and revitalization is paramount. I'll give you just a few examples of our always-on approach to catalog marketing. Veronica Electronica, a new album of Madonna's remixes, has contributed to her career-wide streams jumping 33% this fiscal year to date. The 25th anniversary edition of Slipknot's first album has helped drive an 11% increase in the band's streams this fiscal year to date. And Fleetwood Mac's Rumors was the only catalog release on Luminate's mid-year top vinyl album sales chart. We continue to find new ways to help longtime legends cut through the noise. Last year, we revitalized our approach to the management and marketing of our so-called Off-Raster Catalog. This means we're now taking a fresh, inventive, and global approach to marketing artists who are no longer recording new music for us. As part of this effort, we brought on Orla Ree Fisher in the new role of Head of Dual Catalog Strategy. She will lead campaigns for the many stars where we represent both their recorded music and publishing catalogs, including legends from Led Zeppelin to David Bowie. At the same time, we're complementing our organic growth and increasing the value of music through M&A activity, which will be accelerated by our recently announced $1.2 billion joint venture with Bain Capital. Next, growing the value of music. The industry is increasingly focused on price driven growth, and we continue to see progress in aligning our contracts with streaming services with this new paradigm as we improve deal charts. Since February, we signed renewals with several major services that will provide greater certainty and visibility around our economics. We look forward to seeing the impact these deals will have in 2026 and beyond. In fact, you've seen Spotify announce price increases outside the U.S. earlier this week, reflective of the incredible value proposition that music subscriptions present. And as I've mentioned, we continue to work with our DSP partners on the design and implementation of superfan tiers, which demonstrate the opportunity to better monetize fandom. A critical factor in growing the value of music is to protect the rights of our artists and songwriters. We're committed to embracing AI in ways that benefit our artists, songwriters, and the broader music community. At the same time, we continue our efforts to enable free market licensing for the training of AI models and to protect the visual likeness and voice of our artists from unauthorized defects. Later this year, we expect Congress to consider legislation to implement the AI Action Plan released by the White House in July. While the plan's recommendations don't address, either positively or negatively, the issues of greatest importance to us, we will remain highly engaged throughout the process. There is a broad policy alignment across the copyright industries, including the music industry, regarding the need to maintain strong intellectual property protections in the generative AI space. And now let's turn to our third priority, improving efficiency. Last month, we announced a strategic reorganization plan that will generate $300 million of cost savings to help future-proof the company and unlock the next era of growth. We're evolving into a faster and more focused and innovative company with an even more attractive financial profile. In addition to the financial benefits, which Armin will talk about, our plan will make our company leaner and stronger by compounding our global expertise backed by improved tech tools. I've given Armin oversight of the corporate development and spread-outs teams, in addition to finance organization. Across these interdependent functions, we will take a more holistic approach to discipline and return-focused capital allocation. As part of our plan, Warner Records unveiled a dynamic new marketing setup, while Atlantic Music Group sharpened its hip-hop and R&B focus and launched a country and Americana-driven label called Atlantic Outpost. We've also appointed Alejandro Duque as president of ADA, our independent distribution arm. This expands his responsibilities as president of Warner Music Latin America. Having him in this dual role will help us bring down barriers for ADA clients, plugging them more directly into our infrastructure, and empowering them to build their businesses. We're very focused on growing our distribution business and the ADA brand through great services, flexible deal-making, and tech innovation. And finally, we've hired a new leader in APAC, Loading Phi, He joins us from a telecom giant BCCW, where he most recently served as CEO of the subsidiary Makerville, which focuses on artist management and live events, as well as COO of VIEW, its regional OTT streaming platform. Lofi was born in Hong Kong and has a long track record in scaling creative companies. He has also written hit songs under the pseudonym Yuri. We're excited about his ability to turbocharge our growth in Asia, including China and Japan. Regarding technology, we've made many improvements to our infrastructure that will help us in the long term, including upgrading our distribution supply chain and creating a new interface for our ADA clients. Additionally, we continue to make updates to our innovative artist and songwriter app, WMG Pulse, and expand its user base. We've also begun to roll out a new app for our employees called WNG1. It serves as a single source of truth across the organization, helping to streamline global collaboration across markets, increase impact for artists and songwriters, and ultimately improve efficiency. Building on our recent momentum, we have exciting music coming out from Ed Sheeran, Zach Bryan, Alex Warren, Twenty One Pilots, Somber, Cardi B, David Guetta, and many more. The success we've been seeing gives us even more confidence that we have the right strategy, as well as the expertise to accelerate it. Our mission is to grow W&G through our commitment to artisan songwriter development and more nimble organization, and focused investment. I will now pass it over to Harman.