Warner Bros. Discovery swung to a profit and saw revenue growth of 1% during its second quarter of 2025, driven primarily by its studios and streaming businesses.
The streaming business saw revenue grow 9% to $2.8 billion and eked out a profit of $293 million, compared to a loss of $107 million a year ago, as HBO Max continued its international expansion. Subscriber revenues grew 10% to $2.7 billion, but content revenue fell 17% to $102 million due to lower third party licensing. The company added 3.4 million streaming subscribers for a total of 125.7 million globally, including 57.8 million domestic and 67.9 million international. Domestic average revenue per user fell to $11.16, primarily driven by broader wholesale distribution of HBO Max basic with ads, while international ARPU came in at $3.85.
Meanwhile, studios grew revenue 55% to $3.8 billion, while its profits came in at $863 million, up from a profit of $210 million a year ago, due to the strong box office performance of “A Minecraft Movie,” “Sinners,” and “Final Destination: Bloodlines” that resulted in a 38% increase in theatrical revenue. The segment’s total content revenue grew 61% to 3.6 billion, which included a 115% increase in TV revenue driven by higher intercompany licensing revenue due to the timing of renewals.
But the global linear networks business weighed on the results with revenue falling 9% to $4.8 billion and profits falling 25% to 1.5 billion due to cord-cutting, the absence of the NCAA March Madness Final Four and Championship and the timing of third-party licensing deals. The segment’s distribution revenue fell 7% to $2.5 billion due to a 9% decline in domestic pay TV subscribers, while ad revenue fell 12% to $1.95 billion from a domestic audience decline of 23% and content revenue dipped 4% to $287 million.
Here are the quarterly results:
Net income: $1.58 billion, compared to a loss of $9.99 billion a year ago. This included $1.7 billion of “pre-tax acquisition related amortization of intangibles, content fair value step-up, and restructuring expenses,” as well as a $3 billion “pre-tax gain on the extinguishment of debt.”
Earnings Per Share: 63 cents per diluted share, compared to a loss of 23 cents a share expected by analysts surveyed by Yahoo Finance.
Revenues: $9.81 billion, flat year over year, compared to $9.83 billion expected by analysts surveyed by Yahoo Finance.
Streaming subscribers: Added 3.4 million subscribers for a total of 125.7 million globally.
WBD is targeting at least 150 million streaming subscribers by the end of 2026 and anticipates the streaming segment will deliver a profit of approximately $1.3 billion in 2025. The company expects the studios business to generate $2.4 billion of profit for full year 2025 and has set a long-term goal to reach at least $3 billion of adjusted EBITDA.
The latest results come as WBD is gearing up to split into two companies in mid-2026: Warner Bros. and Discovery Global.
The former, which will be led by WBD CEO David Zaslav, will house Warner Bros. Television Group, Warner Bros. Motion Picture Group, DC Studios, HBO and HBO Max, Warner Bros. Games, Tours, Retail and Experiences, as well as studio production facilities in Burbank and Leavesden.
The latter, which will be led by CFO Gunnar Wiedenfels, will include CNN, TNT Sports in the U.S., Discovery, top free-to-air channels across Europe, Discovery+ and Bleacher Report (B/R). Discovery Global will retain a 20% stake in Warner Bros. to help the company deleverage and is expected to take the majority of WBD’s debt.
In connection with the split, the company completed a tender offer and repaid a $1.5 billion term loan due in 2026 that was financed by a $17 billion bridge facility. That resulted in a $2.2 billion reduction in gross debt. They also repaid $500 million in debt, resulting in a total reduction of $2.7 billion in the quarter.
WBD ended the quarter with $4.9 billion of cash on hand and $35.6 billion of gross debt.
More to come…
