Q2 Loss at Warner Bros. Discovery

Total revenues at Warner Bros. Discovery in the second quarter were down 4 percent ex-FX to $10.4 billion, with the company reporting a reduction in global direct-to-consumer subs.

“The important work we are doing to transform our businesses for the future continues to drive our strong financial performance, as demonstrated by meaningful improvements to our balance sheet and our now increased synergy target of more than $5 billion,” said David Zaslav, president and CEO.

“This quarter alone, we reported over $1.7 billion in free cash flow, and we remain bullish with respect to our delevering story and expect to be comfortably below 4.0x levered by the end of the year and at our target of 2.5-3.0x gross leverage by the close of 2024. All of which positions us well to lean into growth opportunities that will ultimately drive shareholder value, to include our direct-to-consumer business, which, in the wake of the successful launch of Max in the U.S., is tracking well ahead of our financial projections, having generated positive EBITDA in the first half of the year.”

The Q2 loss of $1.2 billion included amortization and restructuring costs.

In the studios segment, overall revenues fell 24 percent ex-FX to $2.6 billion, with content revenues down 25 percent to $2.4 billion with reductions across TV, games, home entertainment and theatrical. TV revenues were lower as a result of production timing, fewer series for The CW and fewer shows sold to its own platforms.

At the networks, overall revenues were down 5 percent ex-FX to $5.76 billion, with distribution revenues down 1 percent to $2.9 billion and ad revenues down 13 percent to $2.4 billion. Content revenues were up 18 percent to $284 million.

Direct-to-consumer subs fell by 1.8 million to 95.8 million as the company merged the HBO Max and discovery+ products to launch Max in the U.S. in May. Revenues were up 14 percent ex-FX to $2.7 billion, including a 2 percent gain in distribution revenue to $2.2 billion, ad gains of 25 percent to $121 million and a surge in content revenues to $410 million.