Warner Bros. Discovery Adds 5.3 Million Streaming Subs as Losses Narrow, Studios Slow on Tough Box Office

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In its Q1 2025 earnings report released on Thursday, Warner Bros. Discovery highlighted their streaming sector as a primary driver of growth. They reported an increase of 5.3 million subscribers, bringing the total to 122.3 million. Additionally, they saw a 8% rise in streaming revenue, amounting to $2.7 billion, and an adjusted EBITDA of $339 million.

In a shareholder update, David Zaslav, CEO of WBD, highlighted that Max’s current direction seems to be deviating slightly from the expansive, all-encompassing plan the company originally proposed.

Or simply:

David Zaslav, WBD’s CEO, noted in a shareholder letter that Max seems to be moving away somewhat from the comprehensive strategy the company initially presented.

It’s evident that Max excels in quality more than ever before. Its secret sauce for success combines original premium storytelling from HBO and Max, locally produced series, top-tier local sports, as well as a wide selection of blockbuster and distinctive films. All this content is consistently delivered with an exceptional level of quality that few can replicate,” he stated.

In the recent quarter, our company significantly outperformed forecasts by analysts on Wall Street. However, there was a drop in revenue for both our linear TV operations and studio division when compared to the same period last year.

In this past quarter, our total earnings amounted to approximately $9 billion, marking a 10% decrease compared to the same period last year. However, it’s important to note that we recorded a net loss of $453 million, which is actually an improvement from the previous year. Additionally, our adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) remained relatively stable at around $2.1 billion. Our free cash flow for this quarter was $302 million, representing a 23% decrease compared to the same period last year.

In traditional television broadcasting, revenues decreased by 7% from last year to reach approximately $4.8 billion, accompanied by an adjusted EBITDA drop of 15%, now standing at around $1.8 billion. On the other hand, studio revenues dipped by 18% to hit $2.3 billion, but managed to boost adjusted EBITDA to $259 million. The growth in studio earnings is attributed to Warner Bros. TV contributions, while the film division faced a challenge due to a less dynamic theatrical lineup this year. However, the company anticipates that upcoming releases like “A Minecraft Movie” and “Sinners” will significantly improve its second-quarter performance.

In the initial three months, the company unveiled its fresh organizational setup, which Zaslav described as offering the business expanded flexibility or options.

In essence, this new structure promotes transparency which enhances our ability to seize strategic opportunities swiftly and adaptably. Previously, we’ve stated that the current media landscape will experience substantial transformation. With increased flexibility and more avenues for generating shareholder value thanks to this new setup, our board now has a wider range of tools to assess and implement changes effectively.

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2025-05-08 14:55