Warner Bros. Discovery narrowed its fourth-quarter web loss by practically half to $252 million, however income fell 6% to $9.5 billion because the media large’s cable TV enterprise continued to undercut its rising streaming and studio property.
The outcomes underscore why Netflix is so eager to accumulate HBO Max and Warner Bros. studio, with Paramount again in discussions to purchase all the firm. Warner Bros. on Thursday made little reference to the continued saga past noting it continues to have interaction with Paramount after figuring out its newest $31 per share provide may “fairly be anticipated” to result in a “superior proposal.” The corporate declined to reply analyst questions concerning the saga on Thursday’s earnings name and continues to be recommending its $83 billion cope with Netflix.
“There might be no assurance that the Board will conclude that the transaction proposed by PSKY is superior to the merger with Netflix or that any definitive settlement or transaction will outcome from Warner Bros. Discovery’s discussions with PSKY,” WBD wrote in its quarterly shareholder letter. “The Board stays dedicated to maximizing shareholder worth and certainty whereas mitigating draw back dangers, and the Board will consider any proposal in opposition to that normal with the target of delivering the most effective deal for our shareholders.”
The streaming and studios section noticed income develop 4% to $5.6 billion and income improve by 6% to $1.2 billion. WBD’s streaming division now boasts greater than 131 million subscribers globally, surpassing the corporate’s 130 million goal established in August 2022. In the meantime, the worldwide linear community division noticed income fall 12% to $4.2 billion and revenue plunge 27% to $1.4 billion.
Listed below are the quarter’s outcomes:
Internet loss: $252 million, down 49% from $494 million a yr in the past. The determine contains $1.3 billion of “pre-tax acquisition-related amortization of intangibles, content material honest worth step-up, and restructuring bills.”
Earnings Per Share: A lack of 10 cents per diluted share, in comparison with breakeven anticipated by analysts surveyed by Yahoo Finance.
Income: $9.46 billion, down 6% yr over yr, barely above the $9.37 billion analysts had predicted.
Streaming subscribers: Added 3.5 million subscribers for a complete of 131.6 million globally.
Trying forward, WBD is now on observe to exceed its 150 million subscriber goal by the top of 2026. It would additionally not report subscribers or common income per person beginning subsequent quarter. Moreover, it stays on observe to succeed in $3 billion in revenue in its studios enterprise, although a timeline for that aim has not been outlined.
“We proceed to execute in opposition to our strategic pillars,” the corporate famous in its quarterly shareholder letter. “In parallel, we’re centered on maximizing income for shareholders. As we transfer ahead into our subsequent section of Warner Bros. Discovery, we stay assured that the enterprise is effectively positioned to ship sustainable efficiency and long-term success in an evolving media panorama.”
WBD ended the quarter with $33.5 billion in gross debt and $44.6 billion in money readily available. It additionally repaid $1 billion of its present bridge mortgage and prolonged the maturity on that mortgage to June 30, 2027.
Streaming progress to speed up
Complete streaming income grew 5% to $2.8 billion throughout the quarter, however income fell 4% to $393 million. For the total yr, the streaming division posted a revenue of $1.37 billion, exceeding the corporate’s steering and greater than doubling year-over-year.
Distribution income grew 3% to $2.4 billion, pushed by a 13% improve in subscribers and the worldwide growth of HBO Max, offset by the beforehand disclosed home distribution deal renewal. Advert income rose 18% to $278 million, pushed by a rise in ad-lite subscribers and offset by the absence of the NBA. Subscriber-related revenues grew 5% to $2.7 billion, whereas content material revenues jumped 20% to $119 million. The rise in content material income was because of the timing of home third-party content material gross sales, offset by decrease worldwide licensing on account of HBO Max’s growth in new markets.
International streaming common income per person fell 9% to $6.80, pushed by an 11% lower in home ARPU to $10.45 on account of a beforehand disclosed distribution deal renewal and worldwide ARPU of $4, up from $3.74 within the yr in the past interval. Shifting ahead, WBD will not escape subscribers or ARPU.
WBD expects to complete the primary quarter with greater than 140 million subscribers, with HBO Max out there in over 100 markets globally and upcoming launches deliberate for the UK and Eire on March 26.
It additionally expects subscriber and associated income progress to proceed accelerating in 2026, pushed by its ad-supported tier, U.S. value will increase throughout the quarter, a powerful content material slate and continued product enhancements and have enhancements. WBD will even proceed to put money into content material and advertising to assist HBO Max’s world growth.
Studios sees quiet finish to sturdy yr
Studios income fell 13% to $3.2 billion throughout the quarter, whereas income fell 23% to $728 million. For the total yr, the division posted a revenue of $2.6 billion, exceeding the corporate’s steering.
Throughout the fourth quarter, distribution income swung to a revenue of $4 million from a lack of $6 million, whereas content material income fell 15% to $2.9 billion. Weighing on content material income was an 11% decline in theatrical income on account of decrease content material gross sales and decrease field workplace revenues from no releases within the present yr quarter; an 18% decline in TV revenues from the timing of intersegment content material renewals and a 34% decline in video games income from increased carryover within the prior yr interval.
In 2025, WBD distributed seven consecutive movies that generated greater than $40 million throughout their opening weekends on the home field workplace – a primary for any studio – and completed the yr with $4.4 billion on the world field workplace. The 2026 movie slate contains “Supergirl,” “Dune: Messiah,” “Wuthering Heights,” “Evil Lifeless Burn” and “The Cat In The Hat.”
Warner Bros. TV additionally has over 70 energetic collection spanning 20 linear and streaming
platforms on the finish of 2025. 2026 marks the primary yr that WBTV will ship extra episodes to streaming platforms than to broadcast and cable mixed. Notable tasks for third events embrace Apple’s “Ted Lasso,” “Unhealthy Monkey” and “Shrinking” and Netflix’s “Operating Level.”
Trying forward, WBD expects studios revenue for 2026 to be comparatively consistent with 2025 regardless of its current field workplace success and a large tv licensing
deal renewal. The corporate additionally will make investments for 2027 and past to assist a extra strong slate of theatrical and tv titles, in addition to the opening of the Harry Potter expertise in Shanghai and Abu Dhabi, and the rebuilding of its online game pipeline.
Twine-cutting takes its toll
The worldwide linear community division noticed income fall 12% to $4.2 billion and revenue plunge 27% to $1.4 billion.
Distribution income fell 8% to $2.4 billion, pushed by a ten% decline in home pay TV subscribers that was offset by a 3% improve in home affiliate charges. Advert income fell 11% to $1.42 billion, pushed by the absence of the NBA and a 22% decline in home audiences. Content material income fell 31% to $311 million, because of the timing of third-party licensing offers.
In 2025, WBD’s home portfolio of networks attracted practically 30% of
primetime cable viewership amongst adults ages 25 to 54 and reached a month-to-month common of greater than 140 million whole viewers. TNT, TBS, Meals Community, CNN and TLC had been 5 of the highest ten ad-supported cable networks for the yr.
CNN reached greater than 800 million individuals globally with greater than 150 million month-to-month customers throughout platforms. The cable information community launched a direct-to-consumer paywall providing in 2024, which then expanded with the launch of its CNN All Entry streaming product within the fourth quarter. The community is projected to succeed in $1.8 billion in income and $600 million in revenue for 2026. WBD has additionally mentioned that “new platform income” would account for $600 million of CNN’s income by 2030.
“We’re inspired by the early efficiency of CNN All Entry and count on subscribers and engagement to proceed to develop as we enter the midterm election cycle and look forward to the 2028 presidential election,” the corporate famous in its quarterly shareholder letter.
Trying forward, WBD expects a 7% and 20% influence to advert income from the absence of the NBA within the first and second quarters, respectively, which it believes shall be greater than offset by an enchancment in working bills. It additionally anticipates continued advert income progress in worldwide markets throughout the Europe, Center East and Africa area, together with Poland and Italy.
Among the price financial savings from the NBA had been reinvested in expanded School
Soccer Playoff rights with protection increasing to 5 of the 11 video games beginning within the fourth quarter. The corporate expects full-year price of revenues to enhance within the excessive single digit proportion vary.
“We are going to proceed to strategically and opportunistically put money into sports activities rights throughout all our platforms to finest attain audiences, and we count on sports activities viewership as a proportion of our whole portfolio to develop meaningfully,” the corporate mentioned.
The TNT Sports activities app will launch later this yr and shall be out there as a standalone possibility and thru distribution and bundling partnerships.
A twisty M&A saga
The newest quarterly outcomes come as WBD’s board re-engages with Paramount after it decided that Paramount CEO David Ellison’s newest $31-per-share provide may “fairly be anticipated” to result in a “superior proposal.”
The tenth bid features a every day ticking price equal to 25 cents per quarter starting after Sept. 30, 2026. Paramount will even pay a $7 billion termination price to WBD within the occasion the transaction doesn’t shut on account of regulatory issues. It would additionally cowl a $2.8 billion termination price that WBD could be required to pay to Netflix and agreed to get rid of $1.5 billion in potential financing prices related to WBD’s debt change provide.
Moreover, the proposal contains an obligation to contribute further fairness funding to the extent wanted to assist the solvency certificates required by Paramount’s lending banks and a “materials hostile have an effect on” definition that excludes the efficiency of WBD’s International Linear Networks enterprise.
WBD’s board has not decided whether or not the revised Paramount bid is superior to its $83 billion cope with Netflix. Within the occasion that it does, Netflix can have 4 enterprise days to match Paramount’s provide and negotiate with WBD to suggest any revisions to its present deal. The Netflix deal stays in impact and the board is just not withdrawing or modifying its advice.
Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET. Netflix has mentioned it expects a deal to shut inside 12 to 18 months, whereas Paramount has argued a possible cope with Warner Bros. would shut inside a yr.
