Warner Bros. Discovery narrowed its Q3 loss to $417 million on revenues that were stable at $9.98 billion.
“I am very pleased with the strong financial results that our company delivered in Q3, underscored by 22 percent growth in adjusted EBITDA and over $2 billion in free cash flow, putting us on track to meaningfully exceed $5 billion for the year and contributing to our nearly $12 billion in debt paydown to date. Among the highlights, our direct-to-consumer business had another profitable quarter with $111 million of adjusted EBITDA and launched its new live-programming offerings with CNN Max and the Bleacher Report Add-On, which are showing early signs of contributing to increased engagement and lower churn on Max. We’ve made great strides in just 19 months and are excited to continue building on this strong momentum as we focus on driving future growth and creating long-term value for our shareholders.”
The company shed 700,000 direct-to-consumer subscribers in the period, with its base falling to 95.1 million, while ARPU was up 6 percent ex-FX to $7.82. The company reported 52.6 million U.S. subs, down from 53.6 million in the year-ago period, while international subs rose to 42.5 million. Direct-to-consumer revenues were up by 5 percent to $2.4 billion, with distribution revenues rising by 5 percent to $2.2 billon and advertising up 29 percent to $138 million thanks to the ad-lite tier at Max. Content revenues were down 17 percent to $120 million.
In the studios segment, revenues were up 3 percent ex-FX to $3.2 billion, with content revenues rising to $3 billion on the strength of the Barbie theatrical release and key gaming titles, despite a reduction in TV revenues.
At the networks, overall revenues slipped 7 percent to $4.9 billion, with distribution revenues down 2 percent to $2.8 billion amid a fall in U.S. pay-TV subs; content revenues down 22 percent to $215 million as a result of lower third-party licensing and international sports sublicensing; and ad revenues down 13 percent to $1.7 billion.