Good evening, welcome to Universal Music Group's first quarter earnings call for the period ended March 31st, 2026. My name is Gavin, I'll be your conference operator today. Your speakers for today's call will be Sir Lucian Grainge, Chairman and CEO of Universal Music Group, and Matt Ellis, Chief Financial Officer. They will be joined during Q&A by Michael Nash, Chief Digital Officer, and Boyd Muir, Chief Operating Officer. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star one again. As a reminder, this call is being recorded. Please also let me remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may vary in a material way. For a discussion of some of the factors that could cause actual results to differ from expected results, please see the Risk Factors section of UMG's 2025 Annual Report, which is available on the Investor Relations page of UMG's website at universalmusic.com. Management's commentary will also refer to non-IFRS measures on today's call. Reconciliations are available in the press release on the Investor Relations page of UMG's website. Thank you, Sir Lucian. You may begin your conference. Thank you. Thank you all for joining us. We reported today that for the first quarter of 2026, UMG had revenue growth of 8% and adjusted EBITDA growth of 4%, both of those in constant currency. This is the 19th consecutive quarter that we've posted growth in both revenue and adjusted EBITDA since becoming a public company in September 2021. Our growth this quarter should be seen in the context of our exceptionally strong first quarter last year. Many of this year's biggest releases are still ahead of us. We do not manage our business quarter- by- quarter. Therefore, the annual picture is far more illuminating. According to recent figures from Music and Copyright, which tracks global market share, in 2025, we achieved a 33% worldwide share in recorded music. That is our highest in 12 years, as well as a 24% in Music Publishing, also our highest share ever in Music Publishing. Obviously, I'm thrilled about both. In the U.S., the world's largest music market, UMG ended 2025 on a two-year high in frontline market share of 37.5%, according to Luminate. Before getting into our creative and operating performance, I want to discuss and address some recent capital market developments which we announced earlier today. What we will not be discussing today is the proposal from Pershing Square that the Board of Directors received earlier this month. We will provide you with an update once the Board has made its decision. Since last year, the Board and Management have been evaluating opportunities to optimize our capital allocation and to provide enhanced information to investors. The EUR 500 million share buyback program we announced in March of this year is just one example of the results of this review process. I have requested, and the Board has approved, the increase in authorized share buybacks to EUR 1 billion to include the earlier announced amount of EUR 500 million. In connection with our original share buyback authorization in March, at that time, the Board also authorized the monetization of half of the company's equity stake in Spotify. As previously announced, artists will share in the proceeds. UMG's share of the proceeds will be used initially for its buyback program. This decision underscores the importance of our capital discipline, the expected returns from our buybacks, and our confidence in the long-term growth of UMG, as well as obviously the broader music ecosystem. We are also committed to give more detail in areas that are key to helping understand our business and investments. One, to help investors review the growth of our underlying businesses, we are breaking out the results of our Downtown acquisition this quarter and will continue to do so for the rest of the year. Two, along the same lines, we're providing a look back at Virgin Music's contribution to our recorded music results through 2025. Three, in addition to continuing to disclose segment EBITDA with our full and half-year results, we're providing segment EBITDA this quarter and will continue providing that information each quarter. Four, in subsequent earnings calls, we're going to be providing greater insight into the ways we have evaluated investments in our business, whether or not they be catalogs or other significant M&A activity. Let me turn to some updates on our creative and commercial progress. Our sustained success is the result of a deliberate long-term strategy, the breadth and depth of our roster, the many ways we create value with our artists and songwriters, and the continued expansion of newer businesses across UMG. Underpinning that strategy is a clear view of where this industry is headed. That's why beyond our core business of building careers for artists and songwriters, we're driving additional growth in four interconnected ways. One, label and artist services. Two, high-potential markets. Three, super fan initiatives. Four, of course, AI. I talked about these at length on our last call, I won't cover each one in too much detail, despite the fact that we have plenty to report. Artist and songwriter development is the soul of our business as well as our company, and it remains the hardest, most valuable aspect of what we do. At the same time, we just don't anticipate changes in the market, we shape them, and we expect ourselves to shape them. We have to constantly evolve. Last quarter, I spoke about the combination of Virgin Music Group and Downtown, bringing more than 5,000 additional business clients and more than 4 million creators in 145 countries into our own ecosystem. I want to take a step back and explain the path we took to arrive here. About five years ago, we foresaw a potential gap in our portfolio, something I couldn't allow. In September 2022, we launched Virgin Music Group and brought in JT Myers and Nat Pastor as co-CEOs to unify and expand our label and artist services business worldwide. That is what we've done. We've grown Virgin's revenue at a 16% CAGR over the last two years. On top of that, with our strategic acquisition of Downtown, we've leapfrogged our competitors to become the number two company in the fast-growing artists and label services market. We can now confidently say what Virgin offers is best in class, a broad and flexible suite of services delivering high-touch support to self-service solutions. Today, we'll share more on the extraordinary performance of both our recorded music labels and our Virgin Label Services business over the last few years. Matt will walk you through it later. I'd like you to come away with two things. First, our core record label business is very healthy. We're growing year after year at attractive rates while also expanding margins. Second, our Virgin and Downtown businesses are highly complementary, growing quickly and on a path to market leadership in a growing sector. Even with this momentum, we still have lots of work to do. The next phase of our plan for Virgin is focused on empowering independent players, raising the standards of service even higher, and growing our community of dynamic labels and entrepreneurs. At the same time, we see a meaningful opportunity for us to capture additional value in high-potential markets. Let's look at Indonesia, for example, as one example. It has a population of 285 million, making it the fourth most populous country in the world. Yet it's only the 34th largest music market. We believe there's still significant headroom for growth. In 2025, four of the top five artists in the market were Indonesian. That tells you something important. To succeed in a market like this, you need sustained local investment and real local expertise. We've stayed committed to that. In 2017, our recorded music market share in Indonesia was less than 10%. Today, we believe our share is more than 3 x that and is now in line with our global share, positioning us as the market leader there. We've achieved this all primarily through domestic A&R, as well as strong local partnerships, which are critical, complemented by one or two small acquisitions. While the market had a 14% CAGR from 2021 to 2025, we're growing more than 50% faster at a CAGR of over 22% for the same period. We've got several other success stories like Indonesia, and I look forward to sharing with them over time. We can't escape looking through the prism of opportunity in these markets and what we're doing and what we see. Our growth across our recorded music, Music Publishing, and label services businesses is benefiting from the work we've done with our DSP partners to institute Streaming 2.0. These agreements encourage smarter customer segmentation, accelerate geographic expansion, create greater consumer value, and drive output growth. This quarter, we're beginning to see uplift from these agreements with more flow throughout the rest of the year. That brings us obviously to AI. We're leading the industry in working with established and emerging AI companies, employing AI in the development of new formats and leveraging music as the critical ingredient to unlock consumer adoption of new technologies as it has for Apple, Google, Meta, and other major digital platforms. On prior calls, we've discussed our growing network of responsible AI partnerships from startups like Udio and KLAY to artist tool platforms such as Splice and Stability AI to a major technology leader such as NVIDIA. Today, I'd like to highlight one important area of the multi-year collaboration with NVIDIA that we announced in January and recently highlighted at their Annual GTC event. Applying AI to preserve, restore, and unlock the value of UMG's vast archives and library. We hold one of the world's most important music archives. More than 6 million recorded music assets, along with video, photography, instruments, equipment, and other crucial artifacts. Our archive team is world-class, but the scale and complexity of this work is enormous. With NVIDIA, we see an opportunity to use AI in two powerful ways. First, to create a deeper understanding of the music, video, and related materials stored across our vaults, across so many formats, dating back to the early twentieth century, believe it or not. Second, to accelerate high-quality restoration, digitization, and discovery at a scale that would simply not be possible through traditional methods alone. This is not AI replacing artistry or expertise. It is AI helping us protect, understand, and responsibly activate one of the most valuable cultural catalogs in the world of any sort. Over time, we believe this work can preserve irreplaceable assets, uncover recordings and videos that have never been commercially released, and enable new products and experiences that will inspire music fans for generations to come. My closing thought on this is exactly the kind of responsible AI partnership we believe in, protecting the artists, preserving culture, and creating new value from the amazing assets already within the organization. Everything begins with our extraordinary artists and songwriters, of whom I'm so proud. A group that is unmatched in their creative brilliance, as well as their commercial success. This quarter, we had new releases from global stars such as HYBE's, BTS, and J. Cole, both of whom debuted at number one in the U.S., and international success, including France's Theodora. At the same time, UMG is leading the U.K.'s creative resurgence following the restructuring of our U.K. business with big hits from Olivia Dean, Sam Fender, and Mumford & Sons. Q2 is off to a strong start, including much-anticipated albums from Noah Kahan and a massive hit single from Olivia Rodrigo, which went straight to number one in the U.K., U.S., and Australia, for example, kicking off the long-term campaign for her third studio album for the rest of the year. As evidence of the global appeal of our artists, let's look no further than this year's culturally significant Coachella Music Festival. More than 30 UMG artists performed, and most impressively, all of the three headliners on the three separate nights were all UMG artists, Sabrina Carpenter, Justin Bieber, and Karol G. Each of three all enjoyed significant uplifts in streaming numbers after their performances. What really happened with Justin was truly historic and shows how an artist's brand, developed with skill and long-term vision over the years, possesses extraordinary and an enduring power. Justin's Coachella performance underscores an important evolution in how we see the music business, why frontline and catalog are now, in a sense, old-fashioned terms. It is a stunning example of how brilliant performance can be amplified globally to engage super fans and introduce a new generation to an artist's entire catalog and library. It has ignited the biggest-ever streaming surge tied to the festival. That surge spread across his entire catalog of eight studio albums, all of which are UMG's. His average daily global streams nearly quadrupled from 31 million to 113 million. The song Beauty and a Beat surged to number one globally on Spotify and Apple Music for the first time since its release 13 years ago. That's why we don't view frontline and catalog as separate entities, but as one holistic opportunity. Creating and amplifying cultural moments that activate and reactivate fan bases isn't limited to just records or live performances. Our ability to ignite music consumption across entire bodies of work has been on full display in recent quarters. Let me provide you with a couple of examples. Take our partnership with Netflix, for example. In recent months, we debuted a South by Southwest award-winning Noah Kahan film to coincide with the release of his new album, along with a documentary on the rise of the Red Hot Chili Peppers called Our Brother, Hillel. Together with Netflix, we've released over a dozen original series and docs. Including Pop Star Academy featuring KATSEYE, concert specials with Olivia Rodrigo, as well as Lady Gaga, of course, and the Sundance-winning Selena y Los Dinos, which is the most-watched music documentary on the platform in the last 12 months, according to Nielsen. Of course, our partnerships extend beyond a single streaming platform. For example, Man on the Run, the acclaimed documentary about Paul McCartney and Wings, premiered globally on Amazon Prime in February, and coming later this year is a new CNN original series hosted by Fred Armisen that will give fans an unprecedented look into UMG vaults, which is a really unique insight and a format which I think could create a new format moving into the future. It's really very, very special. Let me close with this. Over the years, my management team has built what is unquestionably the most successful music company in history. We operate a creative business in an industry that is going through breathtaking changes, a transformation that presents enormous opportunities. The signing of fresh talent, catalog acquisitions, M&A, and beyond, we are confident that our breadth, scale, and industry leadership give us special insight into these opportunities as well as greater ability to seize them. Our strong balance sheet provides us with the flexibility needed to act, and act fast sometimes, but when and only when these opportunities meet rigorous financial and strategic criteria. The entire global team is laser-focused on our long-term strategy. We appreciate the dialogue with all of our investors. We look forward to the conversation as we execute against the many opportunities for growth as well as the success we're creating. Well, that's my report. There you have it. That's what we did, that's what we're doing, and that's what we're going to do. Thank you, and now I'm going to turn it over to Matt. Thank you. As Lucian discussed, we are confident in our strategic plan and the growth that we'll drive for our business over the course of 2026 and beyond. This quarter is the first in which we are consolidating Downtown's results since the acquisition closed on February 20th. With this significant expansion of our label and artist services business, we thought it was important to also provide some color on the performance of our Virgin Music business within our broader recorded music results over the past few years. We formed Virgin Music Group in late 2022, and the business's performance has been impressive. Since 2023, Virgin has grown at a 16% CAGR, finishing 2025 with EUR 790 million in revenue. This represented 8.4% of our total Recorded Music revenue, up from 7.2% in 2023. At the same time, the remainder of our Recorded Music business also grew strongly, achieving a 7% revenue CAGR and an 11% adjusted EBITDA CAGR. On margins, we have frequently discussed mix, particularly growth of Virgin Music within the segment. Let me put quantitative support behind that. While UMG's Recorded Music margins were level from 2024 to 2025 at 25.6%, Virgin expanded by almost 1 percentage point in the revenue mix from 7.5% to 8.4%. This offset 20 basis points of year-over-year margin expansion in the ex-Virgin Recorded Music margin. While there are mixed implications on our margin, we remain confident in our strategy to grow our artist and label services business alongside our label business in order to increase our touchpoints with the fast-growing independent sector. We're excited that Downtown puts significantly more weight behind these efforts. With that, let me turn to our results for the quarter. Our results are laid out in the press release, both with and without the impact of our Downtown acquisition, and I'll provide you with some additional color in my remarks. I'd remind you that all growth rates we discuss today will be in constant currency. Total revenue in the quarter grew 8.1% year-over-year to EUR 2.9 billion. The consolidation of Downtown, initial pricing benefits of Streaming 2.0 agreements, strong physical sales, and healthy synchronization income all contributed to growth in recorded music and music publishing. Downtown contributed EUR 86 million to total revenue following the closing, representing 3.2 percentage points of our growth this quarter. Excluding Downtown, revenue growth was 4.9%. Adjusted EBITDA grew 3.9% in the quarter to EUR 636 million, with EUR 3 million from Downtown, and grew 3.4% excluding Downtown. Margin declined 0.9 percentage points to 21.9%, but this was largely related to the inclusion of Downtown as well as a EUR 10 million loss in our merchandising business, which I will discuss when I go through the segment results. Excluding Downtown, adjusted EBITDA margin declined 30 basis points to 22.5%, with improvement in Music Publishing margin and flat Recorded Music margin. This was offset by the merchandising pressure I mentioned, as well as an increase in corporate overhead that included spend on strategic technology initiatives. Adjusted EBITDA excludes non-cash share-based compensation expense of EUR 60 million, compared to EUR 58 million in the first quarter of 2025. Adjusted EBITDA also excludes EUR 5 million of integration and business transformation costs in 2026. Let me walk through the segments, which will give you more color on our performance. Recorded music revenue grew 8.9%, including Downtown's EUR 72 million contribution, and grew 5.4% excluding Downtown. Total subscription revenue grew 12.5%, with Downtown contributing EUR 54 million. Excluding Downtown, subscription revenue grew 7.9%. Pricing benefits from multiple Streaming 2.0 deals, some of which are still phasing in, contributed 3 percentage points of subscription growth and ARPU weighted volume growth remained healthy. A lighter release schedule against both the stronger release schedule last year and a healthy competitive release slate led to frontline market share declines and for over 2 percentage point offset to our subscription growth. We had high single-digit or double-digit subscription revenue growth in five of our top 10 markets, including the U.S. and China. As Lucian noted, 2025 was our strongest year for market share in more than a decade, and we expect the share reduction in the first quarter to gradually recover as the release slate picks up during the year. Looking ahead, we expect further pricing benefit in the coming quarters from Streaming 2.0 deals signed so far with three of our major DSP partners. We also expect additional Streaming 2.0 deals to be signed later this year. Ad-supported streaming revenue grew 5% and grew 1.2% excluding Downtown. We remain in a transitional period in this category and saw uneven performance across a diverse set of our top platforms in this segment. This reflects, one, audio platforms' advertising rate challenges, and two, video's continuing category disruption resulting from the shift towards short-form consumption. Excuse me. We continue working closely with our partners on better monetization of ad-supported engagement, and we do expect to see sustained growth over the midterm. Physical sales were strong, up 12.7% year-over-year, both including and excluding Downtown. We saw particular strengths from multiple acts in Japan and from BTS in the U.S.. License and other revenues declined 3.6% or 5.1% excluding Downtown due to non-recurring live income in Q1 last year. Underlying licensing revenue grew year-over-year, thanks to strong sync revenue. As Lucian mentioned, we broke out 1Q segment EBITDA and adjusted EBITDA for the first time in today's earnings press release. We plan to do this each quarter going forward, we provided a historical fact sheet with two years of quarterly segment results, which you can find on our IR website. Recorded Music adjusted EBITDA of EUR 565 million grew 6.0% and included EUR 4 million from Downtown. Excluding Downtown, adjusted EBITDA grew 5.3% and margin was flat at 25.7%. Similar to the 2024 versus 2025 impact I discussed earlier, operating leverage driven by Streaming 2.0 price increases was offset by the impact of repertoire mix as Virgin revenue growth outpaced the rest of recorded music. Turning to Music Publishing, revenue grew 7.0% over the prior year quarter, including Downtown's EUR 14 million contribution, and grew 4.3% excluding Downtown. The 4.3% growth was driven by 13.6% growth in synchronization revenue, thanks to stronger advertising, trailers, and motion picture income. 12% growth in mechanical revenue, helped by physical strength in Japan, and 5.6% performance revenue growth. Digital revenue growth of 1.3% was impacted by a difficult comparison against last year's 17% growth, which contained some timing benefits. Adjusted EBITDA of EUR 135 million grew 11.6% with a loss of EUR 1 million from Downtown. Excluding Downtown, Adjusted EBITDA was up 12.4% and margin improved 1.9 percentage points to 25.3%, thanks to favorable revenue mix, partially offset by ongoing higher legal fees incurred in connection with copyright enforcement. Moving on to Merchandising, which was not impacted by the Downtown acquisition in first quarter. Merchandising revenue declined 2% with a meaningful reduction in direct-to-consumer revenue due to the timing of product releases, which was particularly strong in the first quarter of last year. Retail sales also declined, while touring income saw strong growth, thanks to tours for Lady Gaga, Conan Gray, Nine Inch Nails, amongst others. Merchandising adjusted EBITDA was a loss of EUR 10 million, driven primarily by seasonally lower revenue against our fixed overhead base, as well as unfavorable revenue mix with a higher contribution from low-margin touring revenue. In addition, margin was impacted by a timing-related increase in marketing spend. Before turning to Q&A, I wanted to take a moment to update you on share buybacks. As Lucian mentioned, the Board has increased our share buyback authorization to EUR 1 billion. With regard to the first EUR 500 million buyback program that we announced on March 30th, we have purchased just over 1.85 million shares for EUR 36 million through April 24th. Our balance sheet continues to be a source of strength and gives us the ability to pursue opportunities in support of our strategy. We remain confident in our business. We continue to focus on driving long-term value and look at the business over annual and multi-year cycles as we execute against our strong and consistent strategic plan. Lucian, Boyd, Michael, and I would now be happy to take your questions. Operator, please open the line for Q&A. If you wish to ask a question please press star followed by one on your telephone and wait for your name to be announced. That is star one if you wish to ask a question. Your first question comes to the line of Jason Bazinet from Citi. Your line is open. I just had a basic question on AI. It feels like when digital first started, most of the record labels were all on the same page as the DSPs got off the ground. In this AI world, it feels like there's not as much harmony among the labels, I guess I'd say. I guess if you could just comment, A, is that a fair characterization? Then, B, what are the key differences that you see in your industry discussions today in terms of where this should go and could go? Jason, thank you for your question. Michael Nash here. You know, with respect to industry harmony, you know, first of all, as market leaders, we're looking to develop partnerships. We make our own deals. We forge our path out of pursuit of the interest of our artists, and we believe that we've done a very effective job of activating a number of different partnerships as Lucian articulated in his earlier comments. I think that you've seen, for example, a new service like KLAY obtain licenses from multiple partners. There have been announcements, a service, a new service led by entrepreneurial initiative that we did the first deal with Udio, subsequently was able to get a partnership in place with other music companies and enterprises. They're, you know, they're moving forward with their plans, as they have obtained greater industry support. I think you've also seen strong industry action, with respect to litigation, and, you know, taking a very strong position with respect to artists' rights and interests. I think you've seen with respect to conversations with government and lobbying, you know, strong kind of industry alliance with respect to core issues, in terms of regulation and in terms of legislation. I would question the general characterization that there are differences of opinion that would constitute a fragmentation industry posture. Now, you may be specifically referencing the fact that a company like Suno that we're involved in litigation against, has one licensed partner right now, and other music companies have, haven't licensed that partner. I think that that is kind of the exception that proves the rule. In general, I think that it's more a story of industry opportunity that a number of companies are gravitating towards. Again, to end where I started, our perspective is that we're providing leadership in this area. We're forging partnerships in the interest of our artists that we think promote benefits for the entire ecosystem, and that's an approach to market development that we're very comfortable with. I'd like- Thank you. Yeah. It's Lucian here. I'd like to add, I think you need to look at it through this lens that each company. Some of them are developing products and tools around creation, and some of them around creation and distribution. Right. They're different companies at different stages in their development. Some of them are startups that you've never heard of, and there are others that are established platforms that we're creating different AI products with. I can tell you, we'll be in the process of announcing what they are and who they're with the established platforms. As I said, I think you've got to look at it through two different, two different prisms. Different companies doing different things in different ways, that's the huge difference that there was when we started looking at digital music in the cloud and what became ad-funded and then into premium subscription. Your next question comes to a line of Ed Young from Morgan Stanley. Your line is open. Thank you. You've talked to a three-point benefit from pricing in the quarter. Can you give some color on how we should think about the benefits of that as we go through the year and more of these Streaming 2.0 agreements roll in? I just wondered as a follow-up on the rationale for the Spotify stake sale, and obviously the shares of Spotify are far from the highs and given you have a unique viewpoint to judge the prospects for the industry, just wondered if you could elaborate on why now is the right time. Thank you. Hey, thanks for the questions. I'll start with the second one first and then come back to the pricing question. The Spotify sale, it's really a case of looking at the best use of where we wanna spend money. Right now, we see that our shares provide a good value for us and then how we finance that activity. We'll obviously look at the right time to execute that sale over the course of the remainder of the year here. We'll find the best way to do that. You know, what you should read into it is our confidence in our prospects going forward. We talked about the dislocation in value on the last call, we certainly believe that's the case. That's why we kicked off the buyback programs. Excuse me, we discussed using, you know, some of these Spotify shares to fund that. As you, as you noticed what we said, we're only selling part of that. We have tremendous faith in the existing ecosystem. We look forward to continuing to partner with everyone across the ecosystem, the opportunities across the ecosystem going forward are very strong. On the question about the pricing benefit, as we said, we saw the first phase of those kick in in the first quarter. They provided a three-point benefit. As I also said, some of them had a full effect in the first quarter, others of them were phasing in. We should expect to see that uptick a little bit further as we go into the rest of the year. Of course, then there's the opportunity, for other, players that we haven't yet announced deals with, to get those executed as well. As we think about the rest of the year, we get the full quarter impact in Q2 of the ones we already discussed and then additional items from there. Michael, I'll see if there's anything you want to add to that. I think that's a pretty good assessment. I would just underscore that the Streaming 2.0 deals that we've done so far only represent a portion of all subscribers. Not all the wholesale price increases apply to all geographies on the same timeframe. Some partners are going to be raising prices in certain geographies going forward under deals we've already done, and we expect to see further benefits in the coming quarters from new deals that we're signing. As we, you know, pick up in terms of market share, and as we experience more benefit from Streaming 2.0 deals, we do expect to see further growth in subscription. Your next question comes to line of Peter Supino from Wolfe Research. Your line is open. Hi, good afternoon. I'd like to follow up on the last question about retail pricing, and ask you, several streamers announced U.S. price increases during the first quarter, I'd like to better understand the way those retail pricing actions by streamers in the United States transmit to your streaming revenue, in terms of timing and magnitude and whether there's a chance of an acceleration in your business in the next quarter or two. Unless that sound like an overly short-term question, I think the relationship between retail pricing, DSP minimums, and modeling your revenue growth is a really important multi-year question for many of your constituents. If you got time for it, I'd also like to ask you a question about your buybacks. We welcome the announcements, and I'm curious if you'd make a longer-term comment about how Universal thinks about cash in excess of what's required to invest in the business, what the multi-year capital proposition to investors is. Thank you. Peter, this is Michael Nash. I'll take the first question with respect to how retail pricing relates to wholesale revenue. We maintain a multi-pronged model with respect to the new deals that we're doing and our established deals. We capture revenue both on the basis of an underlying per-subscriber minimum and also with a percentage of retail, which means that if there's a price increase above what's anticipated, based on the wholesale, as translated through by the per-subscriber minimum, that we would participate. We are, generally speaking, doing deals where we look to fairly and comprehensively participate in the value that our artists' content brings to our partners' platforms. If you're looking for proportionality, the proportionality should be ballpark, keep in mind that there are the different mechanisms that go into the wholesale model construct. As we do additional deals, we expect to layer in more benefits from pricing over time. I think we've already described, you know, some of the complexities in terms of the scope of deals that we've done, the new deals we anticipate doing, the differences in terms of geography and timing that relate to how you'll see those pricing benefits in our subscription revenue over the course of 2026. Thanks, Michael. Peter, on your question about buybacks and how we think about it longer term, I mean, very consistent with how we've described the business for a good period of time now. I think it starts with the fact that we have the business we have today, because we've had the flexibility to consistently invest in the business, take advantage of opportunities when they come up, and being in a position to therefore execute on a long-term strategy. In terms of within the capital allocation framework, that means we're constantly focused on making sure we build the best frontline roster of artists. You see what we do in the catalog space when it makes sense, and M&A as well. Our dividend continues to be very important to our shareholders and a significant amount of capital gets returned every year to shareholders through that mechanism. Then when we see the opportunities through buybacks, as you've seen over the last month now, and when there's flexibility to do so, then we will go ahead and do that. We've talked for, you know, a long time now about buybacks being certainly something we think about in the capital allocation program, and we're proud to now be in a position where we can have demonstrated that that is an important piece of it. We'll continue analyzing what are the best uses of our capital going forward to build on the remarkable base that we have today so that we continue to be the best and leading music company going forward. I'd like to add one other thing, Matt, to go back to part of the original question. I think you have to look at Streaming 2.0 in terms of what underpins it as a business strategy. It's smarter consumer segmentation that allows us to grow geographically according to which markets have more or less domestic or international repertoire. We talked about Indonesia, we talked about, we've spoken to you about Japan. Very strong domestic repertoire markets. It's gonna provide, or is providing greater consumer value and general ARPU growth for everybody. When we talk about the ecosystem, we talk about everybody. All of these phase in in different times over the course of the individual's respective agreements, and they all come up at different times. There is small operators and global operators and local operators and partnerships, and they come over in a sequence in terms of how they get executed. As I keep saying to you, we can't evaluate the full value of all this on a quarter-by-quarter basis because, you know, we talk about internally the ketchup bottle. Sometimes when you're trying to pour tomato ketchup onto your plate, nothing comes out. Then you leave it there for a few minutes, and then the whole bottle glubs out all over everything. I think that, you know, we've got used to looking at our revenue and how the deals get executed and how we negotiate with them and how we're changing the paradigm with all of these players worldwide. Elevated economics, different products, new consumer experiences, and a sequence on how they come on stream, no pun intended. Your next question comes from the line of Michael Morris from Guggenheim Securities, LLC. Your line is open. Thank you very much. Good afternoon. I wanna talk about two topics, one on AI and one on the financials. First, on AI, Spotify yesterday made a comment that they believe there is a lot of opportunity out there for creators who want to use AI tools, but no one is addressing that right now, and that they don't think existing artists should be left out of AI. My question there is, do you agree with this, that existing artists are being left out of AI? And maybe in a little more detail, how are your artists using AI tools currently, and what would you like them to have that maybe they don't currently have? That's the first question. Second, just on the financials, there is a question about the amount of leverage that you are using and whether you could more effectively use the balance sheet. I'd love to just hear your point of view on what the proper use of leverage is as you run the business going forward. Thank you. Michael, thank you for your questions. Let me first address the question with respect to Spotify and established artists and AI tools. I think that the specific comments that you're referencing, which we were encouraged to hear, follow up on the earlier earnings call where Spotify executives talked about being hungry and excited with respect to AI derivative product. They said that they saw great demand for different super fan segments. We commented at the time that we were very aligned with that viewpoint. What they specifically talked about yesterday, Spotify management reaffirmed that they wanna take this AI opportunity to existing creators with derivatives of existing IP. They said, We have the capabilities and technologies we need. We are the right company to solve this problem. We see exactly the same potential. I think that what they're specifically talking about are category of products that we've indicated our consumer research suggests there is a lot of interest in. These are products that allow remixing, that allow mashups, that allow custom songs, that enable hyper-personalization and co-creation experience with existing IP and existing artists. That relates to the fact that our research says that much more than, you know, any interest in just generic AI output, what consumers want is AI that makes music service work better discovery, better personalization, and gives them a deeper relationship with the artist. We see the kind of products that Spotify was referring to, really directed at that super fan opportunity that our research suggests is very significant. That's something that we very much agree with and support in terms of an outlook. We see the same opportunity there. In terms of AI tools in general, we're very supportive and been working directly with technology partners in deals that we've announced to develop tools for artists ethically. Artist tools that are developed with artists in the driver's seat, artist tools for artists that compensate artists. That's really at the heart of agreements that we've announced with Stability AI and with Splice, and it's part of what we are looking to focus on with NVIDIA. We're very interested from the standpoint of enabling creation with ethical tools, advancing the opportunities for artists. In terms of services enabled by AI for products that are leveraging existing IP, you know, working with existing artists, that's an opportunity that we very much believe in. Before Matt talks about balance, I'd like to add one other thing, that artists' concerns over format evolution are not new to us. We have the T-shirt. They're entirely, totally understandable. I kind of quite like part of your question because in terms of what Spotify said, and I hadn't heard it, but in a way, it's a sort of a call to arms in terms of what the potential change in the formats are. How we as a company and in partnership with our artists and talent, can navigate through the various format evolutions. We've done it before with them, and we'll do it again with them. I think that the fact that all of these global major partners are focusing on this makes the point that it's an additional part of our business and revenue, there's nothing substitutional about it whatsoever. That change takes a period of time, and it's completely, totally understandable because we are on one level talking about creativity and human imagination and art. We have to work with our DSP platforms as well as ourselves internally to respect it. Michael, on your question on leverage, as we've said in the past, we don't look to manage to a fixed target. We certainly believe leverage is an important part of our balance sheet and how we use it to fund the company. It's also part of how we think about maintaining a strong balance sheet that gives us the flexibility to invest through the cycles when opportunities arrive. You know, we believe maintaining the balance sheet strength allows us to continue investing when others pull back. This historically has been a source of very significant competitive advantage. You'll continue to see us find that right balance between using leverage, providing shareholder returns, and positioning the company so that we continue to invest when the opportunities arise that allow us to, you know, build on the great platform that we already have. You should expect to see us continue doing that going forward. Your next question comes from the line of Clay Griffin of MoffettNathanson. Your line is open. Great. Thank you. Matt, you mentioned it in the prepared remarks in terms of the Recorded Music EBITDA margins, but just maybe if you could speak to all else equal, i.e., apart from the mix considerations, how you expect the wholesale price increases that you've laid out here today to flow through to segment EBITDA level. Thanks for the question, Clay. Certainly, as we see those price increases, those contribute to the opportunity for margin expansion. As we talked about a little bit, hopefully gave you a little more color, where you can see how we talk about mix effect plays out. Underneath that mix effect, you see that recorded music has been expanding margin. That certainly continues. You know, price increases absolutely contribute to how we see that. You know, you have that combined with the very strong growth in the volumes of subscription customers. Since we last spoke to you only a few weeks ago, we saw the global numbers. The total market for subscribers globally reached EUR 837 million last year, over a 9% increase year-over-year. We continue to see good volume growth globally. When you add the wholesale price increases on top of that, it certainly gives us an opportunity to continue to grow our EBITDA in the recorded music business. Great. Thank you. Your next question comes from the line of Adrien de Saint Hilaire from BOA. Your line is open. Yes, sir. Good evening. Thank you very much for taking the question, please. Regarding the Spotify stake, if you were to sell it at their current share price, how much leakage would there be in terms of tax and proceeds to artists. Second question, given the volatility that we see on frontline, could you consider pivoting your strategy towards being more of a, if I may say, a catalog-only business, and improve the monetization of that catalog? Maybe a last one, if I may. You talked about market share loss of 200 basis points impact. Do you think that's going to, like, another major record company or is that going to, like, independents and potentially AI artists? Thank you. Look at this, in an entirely different way. I don't know how many times that we have to keep saying cannot view a release schedule through the prism of 90 days. We're comparing where we were against a very successful Q1 last year, and artists are human beings. They make music, and they create, and they deliver according to when they're ready and also what. All our frontline record companies are looking at a multitude of operational issues about when to release, when they're available, what other releases there are in the marketplace, shifts in consumer behavior, et cetera, et cetera. I've said several times that I think that we need to look at ourselves as a, very much as a portfolio approach. Our market share in catalog, incidentally, I think we've had our record market share in Q1. Everything that we do around artists, new artists, I gave the Justin Bieber example just earlier. Justin works in our library and catalog that Justin Bieber performs and records that were created 13 years ago. This is the nature of a company of this size with the breadth of its roster, new artists, established artists, and how their new music and the quality of their new music drives their catalog and drives the past. Again, I've, I think you have to look at this through a 12-year-old music fan is discovering new things for the first time, and that is what music in the cloud has given. That's everything between our deep catalog as well as our new artists. That's everything that we stand for and everything that we work with the artists to actually create. You see that in the kind of numbers and the growth that we've shown. Yeah. Adrien, if I maybe go through your questions backward, the market share impact that we discussed on our results in the first quarter, you asked if that was other labels or independents or AI. Clearly, it's not AI volume. As we spent a good amount of time in our last call on, there is far more conversation about AI music than there is in reality of what people are listening to. We saw no impact from that in the quarter, any different than what we saw last year that Michael spent a good amount of time on the last call walking you through. I'll let him add anything he wants to say on that in a minute. In terms of your question about would we pivot to be more of a catalog business, I would say just go back to Lucian's prepared remarks, where he spent time talking about the specifics of what we do and the value it creates working with artists as they create music. That is who we are, who we will continue to be. Finally, on the Spotify stake, you know, as we've said consistently since Spotify did their initial listing nine years ago now, our position remains the same as it does then. We will have some distribution to our artists that's consistent with our royalty policies. When we have monetized the shares, we've consistently said we will share proceeds. We'll continue to do so. As you think about the net proceeds, you know, you need to think there'll be a tax impact in there as well. So we look forward to letting you know when we have, in fact, monetized those shares and what the net amount that's coming to UMG will be. I'd like one final thing that is important. New music drives our catalog. When we call those artists on roster, artists that are still signed to the company and have a contribution to make and are exciting. Conversely, new artists that you haven't heard of tomorrow are actually creating our catalog of the future. It's a complete virtuous circle of revenue and human imagination. Let me just add a couple points on the AI dilution point, which I think Matt addressed very comprehensively. Keep in mind that last year, as the flood of AI content was rising to the point where tens of thousands of tracks, a third of all uploads, as Lucian pointed out, we had our highest recorded music market share since 2013 according to Music and Copyright. I think there's empirical disproof of the idea that a market share issue is tied to AI dilution. Keep in mind, as we pointed out on the last earnings call, we're very confident we have substantial countermeasures in place at the platforms, anti-fraud, anti-AI dilution, monetization thresholds, AI infringement, and misappropriation protections. All those things we think comprehensively address this issue. Our last question today comes from the line of Will Packer from BNP Paribas. Your line is open. Hi there, Many t hanks for taking my question. Firstly, when it comes to AI products with your DSP partners, we've heard quite a lot today about your alignment and areas where you're working together, could you give us a bit of a help in understanding some of the challenges? Is it the walls of the sandbox, i.e., consumer rights to share? Is it the split of economics? It's a particularly important catalyst for the industry as it can help dispel the AI bear case, perhaps a bit more than startups. We'd love to hear what areas of potential friction. Secondly, in terms of the hopes of an inflection around ad streaming, are short-form video headwinds here to stay until we get new deals, or is there anything you can do to improve trends there? Thank you. With respect to AI products and alignment and what the challenges are, we've done multiple deals with partners that are planning to launch products, you know, later this year. I mean, we have announced deals with Udio and with KLAY. In terms of what we foresee as a broader opportunity, and we've talked about super premium tiers and how AI is really core to that proposition with respect to current DSPs. Technology, you know, roadmap development is something that progresses over time, but there's a lot of activity in this area. We're supporting that activity. We expect to announce new deals going forward. I don't think that there are challenges that are roadblocks that are unusual limitations here beyond what you would typically see in platforms evolving to innovate to take advantage of new opportunities. With AI, you may have some greater complexities in terms of the nature of the technology channel, challenge because there's, you know, significant transformation, in terms of the consumer offer. You know, you may see a greater requirement in terms of, you know, resources to be able to execute technology roadmaps. I wouldn't characterize anything that we foresee in our conversations with our partners as being challenges that translate into roadblocks. As there are no further questions, I would like to thank our speakers for today's presentation and thank you all for joining us. This concludes today's conference. You may now disconnect.