Warner Bros. Discovery’s first-quarter results fell short of analyst expectations, with a loss per share of 40 cents compared to an expected loss of 24 cents. Revenue also missed estimates, coming in at $9.96 billion versus the expected $10.231 billion. The company saw a 7% decline in revenue compared to the same quarter last year, with a net loss of $966 million, an improvement from the previous year’s loss of $1.07 billion. Adjusted earnings before interest, taxes, depreciation, and amortization were down roughly 20% to $2.1 billion. The decline was attributed to lower revenue from the Suicide Squad: Kill the Justice League video game.

On a positive note, Warner Bros. Discovery added 2 million direct-to-consumer streaming subscribers during the quarter, bringing the total to 99.6 million. The streaming segment earned an adjusted $86 million, an increase of $36 million from the previous year. Advertising revenue for streaming increased by 70%, driven by higher engagement on Max in the U.S. due to subscriber growth and the addition of sports content.

Warner Bros. Discovery announced plans to bundle its streaming services with Disney’s, offering a combination of Max, Disney+, and Hulu to consumers at a discounted price. This bundling strategy aims to combat subscriber churn, a major concern for streaming services. CEO David Zaslav emphasized the importance of bundling to reduce customer loss and stated that the company is focused on retention strategies.

Warner Bros. Discovery has been expanding its streaming services globally, with a focus on entering more European markets ahead of the Summer Olympics. The company is also working on new content, with plans for the latest installment of Lord of the Rings set for release in 2026. The studio segment revenue was down 12%, affected by the underperformance of the latest Suicide Squad release and the impact of Hollywood strikes.

Despite the financial challenges, Warner Bros. Discovery has been working on reducing its debt load, which currently stands at $43.2 billion. The company repaid $1.1 billion in debt during the quarter and announced a $1.75 billion cash tender offer to further reduce its debt. The company’s cash position improved, with free cash flow increasing to $390 million, a significant improvement from the previous year.

Overall, Warner Bros. Discovery faced mixed results in the first quarter, with challenges in revenue and profitability offset by growth in streaming subscribers and advertising. The company’s strategic focus on bundling, international expansion, and content development shows a long-term commitment to staying competitive in the evolving media landscape. However, the company will need to address ongoing challenges in its studio and TV networks segments to achieve sustained growth and financial stability.


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