Warner Bros. Discovery released its first-quarter results on Thursday, falling short of analyst expectations in both revenue and earnings despite a robust performance in its streaming division. The company’s stock saw a slight increase in morning trading.
Here’s how Warner Bros. Discovery fared compared to analyst estimates:
- Loss per share: 40 cents vs. an expected loss of 24 cents
Revenue: $9.96 billion vs. an expected $10.231 billion
Despite owning streaming service Max, a portfolio of cable TV networks, and a film studio, Warner Bros. Discovery experienced a 7% decline in revenue, amounting to $9.96 billion for the quarter.
The company reported a net loss attributable to the company of $966 million, or 40 cents per share, an improvement from the previous year’s loss of $1.07 billion, or 44 cents per share.
Total adjusted earnings before interest, taxes, depreciation, and amortization decreased by approximately 20% to $2.1 billion, primarily due to lower revenue from the Suicide Squad: Kill the Justice League video game.
Despite the performance, the streaming segment showed promise, with Warner Bros. Discovery adding 2 million direct-to-consumer streaming subscribers during the quarter, reaching a total of 99.6 million.
Streaming revenue increased to $2.46 billion, while advertising revenue for streaming surged by 70%, driven by higher engagement on Max in the U.S. Additionally, Warner Bros. Discovery announced a partnership with Disney to offer a streaming bundle, including Max, Disney+, and Hulu, to consumers this summer.
On the sports front, negotiations with the NBA for media rights are ongoing, and Warner Bros. Discovery is optimistic about reaching an agreement beneficial to both parties. The company also plans to expand Max into more European markets ahead of the Summer Olympics in Paris.
However, Warner Bros. Discovery’s TV networks and studio segments faced challenges, with TV networks revenue declining by 8% and studio revenue down by 12%. Advertising revenue remained weak for TV networks, while the studio segment was affected by the underwhelming performance of recent releases and the impact of industry strikes.
Looking ahead, Warner Bros. Discovery aims to strengthen its film studio with the upcoming release of the latest installment of the Lord of the Rings franchise, anticipated in 2026. The company’s cash position improved, with free cash flow increasing to $390 million.
In an effort to reduce its debt load, Warner Bros. Discovery repaid $1.1 billion in debt during the quarter and announced a $1.75 billion cash tender to further reduce its debt.
