MUMBAI: Warner Bros. Discovery (WBD) has delivered a mixed bag of results in its second quarter, with its film and streaming divisions providing a much-needed shot in the arm as its traditional linear TV business struggles.
The company, which is planning to split its streaming & studios and global linear networks businesses, reported a net income of $1.6 billion, a stark contrast to the massive $9.9 billion loss it posted in the same quarter last year. Adjusted EBITDA also saw a respectable 9 per cent year-on-year increase, hitting $2.0 billion. However, free cash flow took a hit, falling by 28 per cent to $702 million, partly due to one-off separation costs.
The studios segment was the star of the show, with revenues rocketing by 54 per cent to $3.8 billion. Content revenues, in particular, surged by 59 per cent, largely driven by a strong box office performance from theatrical releases like A Minecraft Movie, Sinners, and Final Destination: Bloodlines. The company’s film slate grossed over $3 billion globally this year and saw five consecutive films open to over $45 million domestically. On the television side, WBTV received 60 Emmy nominations, a record for a studio, with its shows like The Pitt, Abbott Elementary and The Penguin receiving critical acclaim.
The streaming business also showed strong momentum, adding 3.4 million global subscribers in the quarter to reach a total of 125.7 million. Revenues for the segment rose by eight per cent to $2.8 billion, and it turned a profit of $293 million in adjusted EBITDA, a significant improvement from a $107 million loss a year ago. The company’s international expansion, including a successful launch in Australia, helped drive subscriber growth. However, global average revenue per user (ARPU) decreased by 11 per cent to $7.14, mainly due to the influx of lower ARPU international subscribers and the wider distribution of the ad-supported HBO Max tier.
In contrast, the global linear networks business took a tumble. Its revenues fell by nine per cent to $4.8 billion, and adjusted EBITDA plummeted by 25 per cent to $1.5 billion. The decline was attributed to a nine per cent drop in domestic pay TV subscribers and a hefty 13 per cent decrease in advertising revenue, driven by a 23 per cent decline in domestic linear audiences.
Looking ahead, WBD is targeting 12-14 theatrical releases annually and is set to launch HBO Max in Germany, Italy, the UK, and Ireland in 2026. The company also reduced its gross debt by $2.7 billion in the quarter, bringing the total to $35.6 billion.