Warner Music Group Corporation: AI is remixing the opportunity

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Warner Music Group Corporation: AI is remixing the opportunity

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Warner Music Group Corporation

AI is remixing the opportunity

Reiterate Rating: NEUTRAL | PO: 35.00 USD | Price: 28.44 USD

F3Q preview: Well understood market share normalization 08 July 2026

We anticipate WMG’s F3Q results will reflect a normalization in market share alongside Equity

continuation of strong underlying trends in the broader music ecosystem. WMG

continues to see the benefit of PSM escalators and/or recent price increases, and after Jessica Reif Ehrlich

several quarters of robust market share, there has been some mean reversion toward Research Analyst BofAS

other labels, although this dynamic had been well telegraphed exiting F2Q. More +1 646 855 2921

encouragingly, with an additional PSM agreement rolling on in F4Q, subscription jessica.reif@bofa.com

streaming could re-accelerate to exit the year. As we have written, the new deal BrentResearchNavon,AnalystCFA

structure with the DSPs provides a clearer picture for subscription streaming growth, BofAS

+1 646 855 3827

which when coupled with recent cost cutting initiatives, provides visibility into multi- brent.navon@bofa.com

year earnings growth. David Plaus

Research Analyst

Navigating the shifting AI landscape BofAS+1 646 855 1572

Investor attention remains focused on AI, which presents both risks and opportunities david.plaus@bofa.com

for the music industry. While concerns persist around synthetic content and potential

disintermediation, AI also has the potential to unlock new monetization avenues. This

opportunity was highlighted at Spotify's recent Investor Day, which outlined a product Stock Data

roadmap for a higher-priced AI/Superfan tier. Although notably, Spotify has yet to