Warner Bros. Discovery Narrows Loss

Warner Bros. Discovery narrowed its Q1 loss by 10 percent to $966 million on revenues that were down by 7 percent to $9.96 billion.

“We are pleased with our progress in the first quarter as evidenced by strong results in important KPIs,” said David Zaslav, president and CEO. “We delivered meaningful growth in our streaming business with a nice acceleration in ad sales, generating nearly $90 million in positive EBITDA for the quarter. We will soon be rolling out Max to 29 countries across Europe, and the content lineup for Max over the coming year is one of our strongest ever. Warner Bros. Pictures also had a strong start to the year as the first studio to reach $1 billion in both overseas and global box office, and they have a great slate in the works. Importantly, we once again delivered strong free cash flow, even in our seasonally weakest FCF quarter. We continue to make bold moves to transform our company for the future as we position ourselves to take full advantage of the opportunities ahead.

Within the studios segment, revenues fell by 13 percent ex-FX to $2.8 billion as content revenues dropped by 14 percent to $2.6 billion. The company pointed to lower games revenues following the year-ago success of Hogwarts Legacy and reduced TV revenues following the Hollywood strikes, while theatrical and home entertainment both saw gains.

Networks revenues were down 8 percent ex-FX to $5.1 billion. Distribution revenues fell by 6 percent to $2.8 billion, driven by continued erosion of the pay-TV subs base in the U.S., while ad revenues were down 11 percent to $2 billion, but content revenues rose by 8 percent to $264 million.

Direct-to-consumer revenues were flat at $2.5 billion. As at the end of Q1, the company had 99.6 million DTC subs, a gain of 2 million on the previous quarter.