Welcome to Warner Music Group's first quarter earnings call for the period ended December 31, 2023. 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. Good morning, everyone, and welcome to Warner Music Group's fiscal first quarter earnings conference call. Please note that our earnings press release, earnings snapshot, and Form 10-Q are on our website. On today's call, we have our CEO, Robert Kyncl, and our CFO, Bryan Castellani, who will take you through our results, and then we'll answer your questions. For our prepared remarks, I'd like to refer you to the second slide of the earnings snapshot to remind you 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's 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 to 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. Thank you, Kareem. Good morning, everyone. Thank you for joining us today. We're moving at velocity to see the growth opportunities that exist in the music industry today, and we see in the future. I'll talk about how the industry is transforming, the unique opportunities here at WMG, and how we're laying the groundwork to propel our growth for the next decade. But first, I'll start with Q1 results. My references to year-over-year growth rates will be in constant currency, and references to normalized revenue and adjusted OIBDA are adjusted for items that impact comparability. The details of these can be found in our filings, and Bryan will provide commentary as well. I'm happy to report that the momentum we saw in the second half of 2023 has not only continued, but accelerated into Q1, with both our Recorded Music and Music Publishing segments generating record-high quarterly revenue. Total revenue increased 16%, and on a normalized basis, 11%. Recorded Music revenue accelerated to 15%, and on a normalized basis, revenue grew 9%, streaming grew 11%, and subscription streaming increased 12%. These results reflect solid new release and catalog performance, which were supported by DSP price increases. Music Publishing continued to deliver impressive results, with revenue growth of 20%, driven by streaming growth of 30%. Total adjusted OIBDA increased 33% or 10% on a normalized basis. I am thrilled with the momentum we're building with Recorded Music, driven by our ability to deliver great hits across multiple labels and geographies. Recent artist successes and developments include Atlantic's Jack Harlow, who topped Billboard's Hot 100 with his single, Lovin On Me, Warner Records' Kenya Grace, who climbed to number one in the UK, Cher, whose album Christmas debuted number one on the Billboard Top Holiday album chart, Myke Towers, whose recent album went to number one on Spotify's Top Albums Debut for both Global and USA charts, Korean group FIFTY FIFTY, who had the biggest hit of the year on TikTok with Cupid, and King, who had the most-streamed track of 2023 in India. We are firing on all cylinders across many territories around the globe. We had number one hits by C Gambino in Sweden, Bennett in Denmark, Viktor Sheen in Czech Republic, Sira in Germany, and Smolasty and Doda in Poland, just to name a few. In Music Publishing, our strong performance and momentum continued with fifth consecutive quarter of accelerating year-on-year growth. Warner Chappell was named number-one Hot 100 publisher on Billboard year-end charts, with its songwriters landing number-ones on the Hot 100, Hot R&B and Hip Hop songs, and Hot Country Songs charts, to name a few. Our songwriters contributed to massive songs, including I Remember Everything by Zach Bryan and Kacey Musgraves, and Miley Cyrus's Flowers, which both won Grammys, and First Person Shooter by Drake, featuring J. Cole. We're always expanding our publishing roster. Earlier this week, we signed a deal with country superstar Morgan Wallen. We recently signed deals with Kenya Grace and with Swedish band Bolaget, both Warner Music recording artists. We also entered into agreements with Gabito Ballesteros, one of the most in-demand Mexican music stars, and with Boef, the most-streamed artist in Netherlands in 2023 for Spotify Wrapped. We are in a very unique asset class of our own. The short-form nature of music means it's well-aligned with today's discovery and consumption trends, which are driven by the algorithms of the large platforms, and users sharing playlists with each other. Music has the highest repeat consumption of any medium. Music is evergreen. You'll still want to go back to your favorite songs 30, 40 years later. And music is easy for fans to create with. Users of the world's largest social media platforms love using music to soundtrack their own content, further increasing the reach, virality, and popularity of our catalog. As the music business has grown larger, faster, noisier, and more complex, with democratized distribution creating a flood of content on platforms, the role of large music companies is growing exponentially more relevant. It's harder than ever for any one artist to break through the clutter, and that's where we come in. We collect and process large volumes of data and make it usable and actionable, driving repeatable results, a task that is very difficult for any individual artist or a small business because of the resources and skill sets it requires. Our global marketing footprint and expertise, combined with deep technical capabilities to build systems and data insights, enable us to differentiate ourselves in this regard. In fact, looking at the last quarter, songs from the major music label groups represented 94% of the songs on Billboard Hot 100. Additionally, our ability to aggregate large volumes of rights across Recorded Music and Music Publishing provides individual artists and songwriters with more collective bargaining power when dealing with complex, existing, and new distributors and technologies. This will be even more crucial in the age of AI because everyone wants the most popular music of today and an iconic catalog. WMG is a thriving company in a unique and growing industry. We're in a position of strength at a pivotal moment in the music business, and that's the smart time to change, innovate, and lead. Yesterday, we announced the plan to free up more funds to invest in music and accelerate our growth for the next decade. To do that, we have to make thoughtful choices about where we put our people, resources, and capital. We will realize approximately $200 million in annualized cost savings by the end of September 2025, the majority of which will be reinvested into our Recorded Music and Music Publishing businesses. Our plan includes a reduction of our workforce by 600 employees, or roughly 10%, most of which will relate to our owned and operating media properties, as well as corporate and various support functions. Yesterday, we began exiting these media properties, as well as our in-house ad sales function, as they operate outside our core responsibilities to our roster. We're in an exclusive process for the potential sale of the news entertainment websites, Uproxx and HipHopDX, with more to say on that soon. After a thorough exploration of alternatives, we have decided to wind down the podcasting brand Interval Presents and the social media publisher, IMGN. Bryan will provide more details on the financial implications of the plan, but I'd like to tell you a little bit more about it and how we'll be using these cost savings to deliver on our three strategic priorities, which are: to grow engagement with music, to increase the value of music, and evolve how we work together. To grow engagement with music, we're signing and developing the most talented artists and songwriters, sharpening our focus on high-growth geographies and vibrant genres, and using our data and insights to help original talents stand out. Look at the great artist development success stories like Dua Lipa, Jack Harlow, and Zach Bryan. We're also taking a more holistic approach to the management of our deep and shallow catalog. We're doing the detailed work of priming our entire catalog so it achieves maximum impact on the DSPs. At the same time, we're identifying select albums for targeted campaigns similar to those we run by Frontline Repertoire. Recent examples of successful catalog projects include 30th anniversary of Green Day's Dookie and the 40th anniversary of Talking Heads' Stop Making Sense, which drove 33% jump in annual revenue across the band's entire catalog. We're expanding our distribution and administration by building scaled and effective infrastructure to efficiently cater to larger and larger volumes of aspiring artists and songwriters. You've heard me say many times that music remains significantly undervalued, especially when compared to video. The most recent step in the right direction came from Spotify. We're pleased they're introducing a new royalty model, which better aligns economics with the quality content that drives engagement. We view this as just the beginning, and we're continually engaged with our partners to drive faster growth. Another lever to increase the value of music is by strengthening our artist-direct relationships with their super fans. We'll accelerate the building of our new products and experiences as it's an area that's relatively untapped and under-monetized. Everything we do is in service of our artists and songwriters, and we're evolving how our company is structured in order to maximize our impact on their behalf. In today's global economy, where scale and speed matter, shared services are often the best way to pool our resources and promote best practices. We're already made moves in this direction by centralizing our technology, finance, and business development teams last year. At the same time, in a creative industry like ours, instincts, relationships, and subject matter expertise can make all the difference.... So we're working hard to find the right balance so that we'll become more efficient, increase operating leverage, and free up more funds to invest in music and tech, which in turn will drive further sustainable growth. Above all, we're positioning ourselves to be first, to be different, and to be exceptional. We look forward to keeping you updated as we make progress. Our amazing roster of artists and songwriters, combined with our strategy to stay several steps ahead of our fast-evolving industry, will enable us to thrive. Q2 is already off to a strong start, and it was great to celebrate all of our wins at the Grammys this past weekend. Fresh off of signing a new deal with Megan Thee Stallion, she skyrocketed to number one on the Billboard Hot 100. This week, we have five of the top 10 artists on the chart, including Jack Harlow, Teddy Swims, Zach Bryan, and Benson Boone. We also have some massive artists dropping later this year, including releases from Cardi B, Coldplay, Sia, Charli XCX, Gunna, and Benson Boone. We're incredibly optimistic about the future of the music industry in general and the Warner Music Group in particular. With a refreshed leadership team that is gelling incredibly well and our significantly upgraded tech capabilities that are starting to drive results, we're laying the building blocks for future success. The music ecosystem is healthy and growing, and we're excited about the industry's continued progress in realizing the true value of music. Now, here's Bryan to walk you through our financial results. Thank you, Robert, and good morning, everyone. In Q1, we returned to healthy double-digit growth on a reported and normalized basis that was underpinned by strength across both recorded music and music publishing. Before I get into details, I want to remind everyone that our references to normalized will adjust for items that impacted year-over-year comparability. The previously disclosed items affecting comparability include the BMG digital revenue roll-off, which was $13 million unfavorable in the quarter, and a catalog licensing agreement extension, which had a favorable impact to recorded music licensing revenue and Adjusted OIBDA of $68 million and $67 million, respectively. In addition, there was a renewal with one of our international digital partners that resulted in upfront incremental revenue recognition of $27 million in the quarter. This favorably impacted recorded music streaming revenue. The Adjusted OIBDA associated with this renewal was approximately $10 million. The details relating to these items can be found in our earnings press release. In Q1, total revenue grew 16% and Adjusted OIBDA increased 33% with a margin of 25.8%, an increase of 330 basis points over the prior year quarter. On a normalized basis, revenue grew 11% and Adjusted OIBDA increased 10% with a margin of 22.6%, which was in line with the prior year quarter. Recorded Music revenue grew 15% and 9% on a normalized basis. Additionally, streaming revenue grew 11.4% on a normalized basis, an improvement from the 9% we reported last quarter. Subscription streaming revenue grew 14% or 12% on a normalized basis, supported by DSP price increases. Ad-supported revenue increased by 10%, reflecting sequential improvement from traditional formats, as well as the impact of the TikTok renewal, which went into effect last quarter. Physical revenue increased 13%, driven by strong releases in the U.S., Japan, and U.K., including releases from Prince, Kyosuke Himuro, and Cher. Artist services and expanded rights revenue decreased 4% due to lower merchandising revenue, partially offset by higher concert promotion revenue in France and Japan. Licensing revenue grew by 81%, primarily due to the aforementioned catalog licensing agreement extension, as well as the timing of new licensing deals, primarily in the U.S. Recorded Music Adjusted OIBDA increased 36% with a margin of 28.5%, an increase of 440 basis points. On a normalized basis, adjusted OIBDA increased by 11% with a margin of 24.8%, an increase of 50 basis points. Music publishing continues to deliver strong results, with revenue growth of 20%, driven by strength in streaming and performance. Digital revenue and streaming revenue increased by 30%, reflecting the continued growth in streaming and the impact of digital deal renewals. Performance revenue increased by 11% due to strong artist touring activity in Europe, while mechanical and sync revenue were flat. Music publishing adjusted OIBDA increased 18% with a margin of 28.3%. Turning to CapEx, we saw an $8 million increase from the prior year quarter to $29 million due to increased spend in technology. Operating cash flow increased 40% to $293 million, from $209 million in the prior-year quarter. Operating cash flow conversion was 65% of Adjusted OIBDA. Free cash flow increased 40% to $264 million, from $188 million in the prior-year quarter. The increase in operating cash flow and free cash flow was primarily driven by strong operating performance and timing of a DSP renewal. As of December 31, quarter end, we had a cash balance of $754 million, total debt of $4 billion, and net debt of $3.3 billion. At the end of the quarter, our weighted average cost of debt was 4.6%, and our nearest maturity date was 2028. We always look to take advantage of market conditions to optimize our capital structure. To that end, on January 24th, we repriced our term loan, extending its maturity date to 2031, and lowering our go-forward average cost by 25 basis points. As Robert mentioned, we just announced the plan that will enable us to sharpen our focus on core areas of our business and accelerate our go-forward strategy. I will provide an overview of the financial impacts, and you can also refer to the 8-K we filed yesterday for further details. The plan will deliver $200 million of annualized run rate cost savings by the end of fiscal 2025, including benefits associated with our previously disclosed financial transformation initiative. We will allocate a majority of the cost savings to increase investment in our core businesses, as well as new skill sets and tech capabilities. The plan will result in a pre-tax charge of approximately $140 million, which is composed of $85 million in severance costs and a $55 million non-cash impairment charge related to the businesses we are exiting. The net after-tax charge is estimated to be $105 million. For the remainder of fiscal year 2024, the foregone revenue impact to Recorded Music, Artist Services, and Expanded Rights is estimated to be approximately $45 million, with negligible impact to Adjusted OIBDA. Approximately $120 million in a pre-tax charge will be incurred by the end of fiscal 2024, of which $55 million relates to the previously mentioned non-cash impairment charge. The remaining $65 million will be related to severance costs, which, based on the timing of payments, will have a cash impact of $35 million in this fiscal 2024. We believe that our plan will position us to focus on mission-critical areas, freeing up more capital to deploy at the highest return opportunities, ultimately driving shareholder value. As we look ahead, and as Robert said, Q2 is off to a solid start. Our Q2 release slate will feature new music from Dua Lipa, Megan Thee Stallion, Sia, Green Day, Benson Boone, Gabby Barrett, Peter Fox, and The Black Keys, among many others. We are excited about albums that we have planned from some of our superstar artists scheduled for later this year as well. Regarding the BMG roll-off, we expect the revenue impact to increase to approximately $25 million in fiscal Q2. This amount will increase to a quarterly run rate of approximately $35 million by Q4, fully rolling off by the end of fiscal 2024, as BMG gradually brings other digital partners in-house. As a reminder, this continuation of BMG's physical distribution will occur by the end of October 2024. In closing, our goal remains to deliver healthy top-line growth, margin expansion, and strong cash flow conversion on a consistent basis. Both the strategic actions we're taking, as well as our stronger release lead, will position us favorably to deliver on these objectives in 2024 as well as for the long term. Thank you to everyone for joining us today. We'll now open the call for questions. ... Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for questions. Our first question comes from Kannan Venkateshwar with Barclays. You may proceed. Thank you. So Robert, Bryan, one for both of you, if you could, you know, if you could help us understand what you would do differently as a result of the new plan you announced. And also you mentioned an increase in music investment. Could you help us scale that and also what that really involves, in terms of things that you might change? I mean, does it mean A&R steps up or, you know, you invest in over a longer term over the-- in different assets? And along the same lines, how should we measure success of the plan? If you could outline that, that would be helpful. Thank you. All right. Thank you. So what we're doing is, we're creating a flywheel that starts with efficiency and operating leverage that's helping us, that's helping us grow efficiently and free up more money, all along the way. The use of the money is really in two areas, predominantly in music, and a little bit in tech, to support all of that. In music, today, if you look at our deal pipelines, we have quite, you know, quite a lot of opportunities, that we can't fully materialize because, you know, how we manage our, our balance sheet, our dividends, you know, our, you know, operating responsibly. And we have a lot more opportunities that, today, we can effectively afford. So, looking at that, combined with an investment framework that we developed, which allows us to be even more selective about those opportunities, this is a framework that we developed based on the data that we're collecting from third party, third parties, our first-party data, and real-time trends, etc. And we're being really thoughtful and intentional about where we want to invest. So all of this work is giving us a lot more dry powder to put that in place. And obviously, with tech, it's really important that tech is supporting efficient growth of the company and introducing as much automation as possible into our systems and processes, both on the recorded side as well as on the publishing side. It also helps us monetize our entire catalog. I'll give you one small example, which is, you know, when you manage millions of copyrights, that's a lot of metadata, that's a lot of thumbnails on, on a whole bunch of DSPs. And freshness of thumbnails or motion art, things of that nature, help streams, which helps revenue, but it's really difficult to do that manually across such large volume of content. So, so we developed an AI tool that helps us update it, create new one, etc. So there are lots of tricks of this trade that we can deploy with technology to help drive revenue as well. And then there are other new monetization opportunities that we can lean into. So in combination, both of those, you know, tech helps us be more efficient, and music, we believe, has lots of opportunities, and we're much more intentional about them based on the framework that we developed. Kannan, it's Bryan. I would just add, as Robert said, that the charge here is that these efficiencies will add operating leverage and help us drive that flywheel. For 2024, you should expect the impact to be fairly muted. It will take some time for us to implement and start to ramp the savings. And it's similar on the investment side, as Robert said, we'll continue to drive our pipeline of, not M&A necessarily, but also A&R and acquisition of catalogs as well as licensing of artists. And those take time as well, and those investments, I think you will start to see in our results, and we'll continue to update on that. But the overriding benefit of this is to add confidence and flexibility to our long-term goals for healthy top line and margin expansion on a consistent basis. And so I think you'll start to see this ramp in 2025. Thank you. Thank you. One moment for questions. Our next question comes from Benjamin Swinburne with Morgan Stanley. You may proceed. Thanks. Good morning. Robert, two questions for you, one about sort of the industry and one about your company. On the industry front, you know, over the last year, particularly when you first started, you talked a lot about better aligning incentives between streamers and labels and artists. Feels like a lot happened, you know, positively last year in 2023 in that direction, but knowing you, I'm sure you think just getting started. So I just wanted to get sort of an update on where your focus areas are in terms of continuing to move that alignment forward to the betterment of the whole industry. And then on the company, you know, there's a lot of change happening at Warner Music, a lot of technology that seems to be getting implemented, particularly in the hands of your creative executives. How is the system handling that? You know, any stress that, you know, has popped up? Or do you think there's sort of alignment across the organization as you sort of bring technology and creativity together internally? Thanks a lot. Sure. Thanks, Ben. So your first question on the industry and how we're aligning. Yeah, you're right. A year ago, we were just talking about things, and today, we've got a full round of price increases by, you know, all the important DSPs. And we have new sort of artist-focused models around the actual remuneration of the initial stages of it, as you pointed out. So it's incredible to actually see the progress in what I would say is a fairly short amount of time, because these things are complex and people compete with each other. So it's not easy to orchestrate all of that. And so I think what you will see is continued progress on that on both sides. I am very focused on this. You know, in my opening remarks, I mentioned it is one of our three priorities, and for me, it's personally a very, very high priority. I spent a lot of time thinking about it, a lot of time working on it with the team, and a lot of time working on it with our DSP partners. It is important. I think this is one of our very large opportunities. Pricing overall is a very, very large opportunity for the industry, and we just need to do it responsibly so that we maintain growth together with our DSP partners, but at the same time, you know, focus on ARPU and expand it. The way I talk about it is we should be not only hunting, but we should also be harvesting. The industry obviously has focused on growth over the last 15 years and was only hunting, and we just need to do both of those things, in different markets and be much more intentional about that. The second thing on the company, Ben, you asked about how—you know, obviously, I've refreshed quite a lot of the leadership team. There's lots of other people who joined the company, and lots of people left the company, and we're integrating two cultures, right? Obviously, music culture rooted in media and creativity, and technology culture rooted in coding, and they're quite different. What I can tell you is that, I thought it was going to be a lot harder, than it has been for us. And I think... But the credit for that doesn't go to me. It goes to Max Lousada, Ariel Bardin, you know, the leadership team has really embraced this. And I think generally, people speak about people from the music industry unfairly in this regard, because everybody wants technology to help them. And when you have it at your disposal, it's wonderful. You make smarter decisions, you have better tools for frequency and reach in terms of marketing, you can push through more content through our systems, through our supply chain, and so if you can have it, you want it. And you know, the team has done an incredible job over the last 10 years, having far less of it, and they still did a great job, but they want the help. So the leadership team has really kicked in, is gelling. We have great new processes around all of this, and I'm very, very confident that what I set out to do is already happening, and it will just, it will just accrue in each quarter and each, you know, and each year. So, yeah, very confident. Thanks a lot. Thank you. One moment for questions. Our next question comes from Michael Morris with Guggenheim Securities. You may proceed. Thank you. Good morning, guys. Two questions, one about your content slate, and one about your TikTok relationship. So on the first one, can you talk about how much of the revenue momentum that you saw, particularly in recorded music streaming, was fueled by that improved content performance as opposed to some of the underlying trends, like price increases in the industry? And as we look at the fiscal second quarter, should we expect further acceleration in the rate of streaming growth, given that you have this robust slate and the comparisons ease a bit? So that's my first question. And then second, on the TikTok relationship, you know, you guys reached a new agreement with TikTok. There's a very high-profile dispute in the market with one of your peers having taken their content off of the service and not reaching a new agreement. I understand you can't speak about somebody else's deal, but maybe in light of what we're seeing in the market, what, what gives you confidence that the TikTok deal you did was right for you and your artists, and, and how is it contributing to your growth at this point? Thank you. Hey, Michael, it's Bryan. I'll take the first part of that just on the acceleration, particularly in recorded music streaming in the quarter. And as you know, there's a lot that goes into that, but certainly price increases contributed, and I think we called that out, but also the stronger slate, particularly year-over-year, came out of Q4 with momentum, some launches in Q1. And as we sit here today, as Robert alluded to, the slate is strong coming into Q2, and we're excited about the back half of the year. So as we've said, and it has been a focus for Robert, Max, and the team, is consistent pipeline of releases, and that has been showing up in the results, and so we are expecting for that to continue. I guess I'll take the TikTok one. The details of their dispute. What I can tell you is I have a pretty unique experience in this. Obviously, having been on the other side and having gone through these types of disputes, where we have where content has come down. And so I know exactly what both Lucian and Shou are feeling. I've gone through all of those feelings multiple times. And it is, it is not great for either side, obviously, right? Because I think everybody wants to consummate a deal. Whatever you read in the press, don't believe it, because you don't know the definitions of any of the words that are there, and that is where all the disputes begin. And, you know, the thing that I can tell you is that I know both really well, and I'm confident that they will, at some point, find an agreement, because again, from the YouTube experience, music is incredibly helpful to virality of content, right? People, when they're creating content, they love trends, they love music. That's what helps it significantly, makes it better if they soundtrack it. So obviously, that's valuable to a platform. And, conversely, TikTok, YouTube, Reels, you know, all of those platforms are obviously helpful to making music popular, right? We all love that, on the music side. And user engagement is great. I spoke about it in my opening, right? That this is also what makes music great and different from all other forms of medium. So there are mutual benefits here, and it's just about what is the right fair value exchange. Sometimes you have to go through the price discovery of this kind of a step. That's okay, too, right? Because people find out exactly what it is and what it means to them. Obviously, I have an interest in them working it out. I want them to work it out. And I think they're both reasonable people that will find a compromise. But as far as our deal, I'm always very confident in the deals that we do. We don't follow other companies. We don't do carbon copies of other deals. We do our own, which is why we did the one last year. Again, I've had sort of unique experience from both sides to, you know, to bridge our disagreements. It wasn't easy with TikTok. Our deal was very difficult, too, but we got there. And for us, it was fair, but it was also a different time. So I don't know what is driving Universal's positions, but you know, if there's any way we can help them, we will, all of us. And I'm confident they'll sort it out. Michael, just to add, I mean, Robert said we're obviously wishing for a collaborative resolution there. But TikTok, as you see our ad-supported revenue growth at 10% in a quarter, TikTok and the deal we executed last quarter certainly contributed to that. And so, we like our TikTok deal, and it continues to be a driver of growth. Thank you, both. Appreciate it. Thank you. One moment for questions. Our next question comes from Benjamin Black with Deutsche Bank. You may proceed. Great, good morning. Thanks for taking my question. So, Robert, could you give us an update on sort of your thoughts around, you know, perhaps or maybe the discussion you're having with some of your larger DSPs and their respective moves to more of an artist-centric model? It sounds like you're optimistic for some incremental positive change in the near to medium term, so it'd be great to hear your thoughts on that. And then secondly, on the publishing side of the business, it just continues to outperform. So I'd be curious if you could, you know, unpack what's going on there from an operational standpoint, and how sustainable or durable are the current trends there? Thank you very much. Thank you. So, on the DSPs, so our discussions are in early stages, because we first have to develop our frameworks and how we think about the world developing from here. This is one of the reasons also I brought Carletta Higginson into the company. She's a very strong innovator on deal structures, both across publishing and recorded music, and doing so in a very collaborative manner, but she knows how to drive significant change. And so we've been developing this strategy and started to talk to DSPs about it. There are multiple different ways to look at it. One, there are options that provide zero disruption to users, and there are some that provide mild ones, and then there are some that provide more radical ones. You know, the work that we need to do is figure out how we explore all of, you know, how we explore them across the spectrum, and what is the best way to roll it out, and how to do it in a way that continues to drive growth, subscribers, more and more people in a premium experience, but at the same time, optimizes it. So none of this should be interpreted as we want to increase pricing dramatically, but then slow down the growth at the same time, which is what happened. That is not it. Again, I have an experience from the other side to drive growth, and I want to maintain that. So I think being thoughtful about what also drives the DSPs is really, really important. That is how we, you know, that is how we get there. So that's one. So I just want to have joint business plans together with them to reach, you know, higher levels of growth for both of us. On the publishing side, publishing is an incredible business. It's like, you know, when you see it from the, you know, I've always saw it from the outside. When you see it from the inside, it's truly an incredible business. And it's really, it's obviously there's the creative component of it, which we do incredibly well, but there is also the administration component of it, which is very tedious, very operational, very scaled, and it's finding pennies all around the world, in every couch around the world, right? So it's like I said, you have to do. And that is also where we can deploy technology to do it better, with higher return, and more scale. And, I think, you know, Guy and Carianne are dividing their duties incredibly well, an excellent team leading Warner Chappell, and they've been very, very operational, for a long time. So the results are, you know, showing up, based on that. So I'm confident in their continued performance. Great. Thank you. Very helpful. Thank you. One moment for questions. Our next question comes from Rich Greenfield with LightShed Partners. You may proceed. Hi, thanks for taking the question. Robert, part of the TikTok dispute seems like it's focused around AI and essentially not. There's obviously the obvious problem of third-party AI content from outside of things like TikTok being put onto TikTok. But part of this dispute seems to be TikTok actually creating tools and enabling the creation of AI music that would count sort of as part of how they value or decide who gets what payments. And I'm just curious, as you think about your relationship with TikTok, could you just give us your view on sort of how you're dealing with them on AI music and sort of that broader of like, how Warner gets paid relative to the creation of AI music within their platform, if that makes sense? So, I would actually expand your question a little bit because the issue is not just TikTok. It's TikTok, YouTube, but, Totally fair. Totally fair. Yeah, correct. It's a, you know, you're asking a question that is obviously very relevant across all of the platforms, because the reason I can't recall which quarter it was, but I basically at some point I spoke about my prioritization of partners for AI, starting with the platforms, then the secondary focus would be the generative AI engines, and the third is governments and regulation in that order, because the platforms not only have the gen AI engines, but they are really the place where the content ends up, right? Like those platforms that I mentioned is where no matter what the engine is, the content. People will want the views, the streams, that's where it's gonna end up. So our work is focused on making sure that the rules of the road on those platforms respects copyright, and we have a lot of copyrights. Universal has a lot of copyrights. Sony has a lot of copyrights, right? And, and many others, Disney, etc. So, it's really important to have clear rules of the road, not only for the first-party content that they're creating with their tools, but even more importantly, for content that's created with other tools that ends up there. And I think that's generally like the forgotten thing. That is, that is really important, so it has to be. It has to govern all of that. So that is why they're squarely all of them in my sight. And this is something that we have been working on. I can't share any details on this, but it is a very top area of priority. This goes into my second bucket on increasing the value of music, right? Like this is, it's because it has copyright has to be respected, the outputs and training on our copyright has to be respected, and eventually the laws will reflect it, but the platforms will run ahead of the laws, and it's important that they do the right thing, and I think they will. We just need to make sure that it's also aligned across all of them, not just one and not the others, because then we disadvantage them. So I can see there is disputes, you know, between you know, let's say Universal and TikTok over that, because these are, you know, fast evolving technologies and, you know, the ground is shifting. Thank you. Thank you. One moment for questions. Our next question comes from Batya Levi with UBS. You may proceed. Great, thank you. A follow-up on the streaming revenue growth side. Can you talk about if you have already started to see any change in trends since Spotify implemented the policy change in the beginning of the year? And, on ad-supported, how should we think about revenue growth going forward? Are there any changes in the royalty structure that could impact that trend? Thank you. Batya, thanks. It's Brian. I think you're referring to Spotify's reallocation of roughly the $200 million over five years. ... Too soon to say. I, I think that's also gonna take some time to ramp up, so we have not seen an impact of that yet. On the ad-supported side, again, you saw we broke it out versus subscription streaming, and it includes the emerging platforms like TikTok, and we continue to see favorable stabilization there in the core ad-supported piece, excluding the emerging platforms. And so that does tie more closely to the overall marketplace, where coming off, I think, easy, weaker comps year-over-year, so we're seeing continued growth of stabilization there as well. Got it. Thank you. One more follow-up, if I may. On the pacing of margin expansion through the year, how should we think about that this year as you approach the 100 basis points expansion target? Thank you. As we had called out earlier in last quarter, our back half, just given the release slate, stronger release slate, we will see our margin expansion tick up through the course of the year in Q3 and Q4. Okay. Thank you. Thank you. One moment for questions. Our next question comes from Sebastiano Petti with J.P. Morgan. You may proceed. Hi, thanks for taking the question. I think, Robert, just, you know, stepping back for a sec, high level, multi-year, you know, I, I guess your thoughts on a multi-year basis, thinking about some of the initiatives you're driving. I think, you know, you talked about, catalog again today, seems to be a priority for you. Some of the, changes or so... the approach to, you know, distribution for independence seems like a longer-term kind of priority for you as well. How long does that take to manifest itself, perhaps, in the, you know, recorded music streaming metrics? Maybe just how you're thinking about the pacing of that. Is there additional, you know, implementation or changes from an investment perspective that need to go into that? And then, also, again, Robert, another one, I guess, you know, the hunt and harvest. How are you thinking about the timeline perhaps of maybe some of the segmentation changes, perhaps, that may occur at the DSP level? Is that gonna be bifurcated, to some extent, you know, between developed markets, emerging markets, and maybe just how you're thinking about that evolving over time? Thank you. Perfect. Thank you. So on some of the initiatives, yeah, there are quite a few. They're in flight already, so this is not, like, something that we're just planning. Like, one of the reasons that we decided to step on the pedal and, and accelerate is because we already started to work on our growth levers, you know, months back, and a clear vision on what we need to accomplish. And our teams have started to gel, and this goes, actually back to one of the earlier questions, to how the team is gelling well together. You know, we have work stream, growth streams across technology and the business, and we're focused on those, and some of them, I think will start yielding results this year already. You know, think of all of this as continued incremental improvements. That is my goal, that every year from all of these initiatives, we just drive incremental improvement and just steady and forever. But we'll. You'll start seeing that this year. You know, I would say on the distribution front, as you discussed, obviously, first, we're focused on efficiencies with our own supply chain, but then really, distribution is how we externalize that to third parties. So it's the right sequencing of that, and I would say you'll start seeing the results of that, you know, over the course of, I don't know, next, you know, one to two years. Obviously, on the supply chain, internally, that we'll start seeing much faster, and then on the distribution side, it will, yeah, it will be on the timeframe that I just mentioned. On the DSP hunt and harvest process, so changes like this, if you do them responsibly, usually take, I don't know, 9 months, a year to figure out together with partners, right? So this is not something where you go and strong-arm somebody. You have to work together collaboratively, do lots of analysis, figure out what the business plan is, and that is the right approach. And, you know, we've done that several times when I was on the other side. So that's - that is how, how I think about it. And, you know, and you have to do it with multiple partners. You have to coordinate. So that's that is the responsible way to approach it, and I think the... You know, when you think about the different markets, it is very obvious that dual approach makes sense, or, you know, or discerning approach based on the properties of the market. And, and I'm, you know, I'm, I'm glad that some of our partners are already seeing it that way as well, because it, it is in our mutual interest. So we just, we just gotta do it right, and we gotta do it together and be very methodical and, and analytical about it together. Thank you. Thank you. One moment for questions. Our next question comes from Kutgun Maral with Evercore ISI. You may proceed. Great. Good morning, and thanks for taking the question. I just wanted to follow up on the outlook for Recorded Music, ad-supported trends. I think growth accelerated from low single digits two quarters ago to 7% last quarter to now 10%. So clearly encouraging trends. Bryan, you just talked about some continued stabilization in your answer to Batya's question regarding core ad trends. Can we see that improving further, given some of your key partners, like YouTube, are seeing fairly notable improving trends? And on the emerging side, can we still expect to see some benefits from renewals with those partners later this year? Thank you. Thanks, Kutgun, for the question. On the renewals, we don't necessarily comment on our negotiations with partners. It's a promising, growing platform with the emerging partners, and we'll continue to work with them collaboratively to grow the space. On the ad-supported, again, they're, you know, YouTube, Spotify, continuing to see favorable trends there in core ad-supported, and we would expect that to flow through over time. It does take time, and I think we're all seeing a stabilization there, although choppy in places across the ad marketplace. But that stabilization, we've continued to see, and based on their results, we would look to see that coming in future quarters as well. Thanks for the question. Thank you. Thank you. I would now like to turn the call back over to Robert Kyncl for any closing remarks. All right. Well, thank you. Well, what I'd like to say is that, you know, being a year on the job, I feel we're in a very strong position. It's, it's incredible to see the amount of work that we've done preparing ourselves for it. We have a refreshed team. We know what we need to do. We're confident to put it out there publicly, and we're going after it. And all of this is truly underpinned by having the right leadership team that gels together really well, and amazing teams that we've been investing into all around. We're delivering results, seeing, you know, seeing us having success on the charts with great talent that we signed just a few years ago, it's incredible. So I'm very confident about our continued performance and have great belief in the team that's here with me. So thank you very much, and we'll talk to you in the quarter. Thank you. Thank you for your participation. You may now disconnect.