Warner Bros. Discovery Inc - Class A
Q2 2026 Earnings
Includes $75 million pre-tax loss on extinguishment of debt, $1.1 billion of pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses, and a $433 million income tax benefit. Prior year Q2 included a $2,958 million gain on debt extinguishment.
Market Reaction
Did WBD Beat Earnings? Q2 2026 Results
Warner Bros. Discovery delivered a complicated second quarter, posting GAAP earnings per share of $0.06 that cleared the consensus estimate of negative $0.10 by 158.94%, even as revenue of $8.72 billion missed expectations by 5.39% and fell 11.2% year over year. The GAAP figure includes a $75 million pre-tax loss on debt extinguishment, $1.1 billion in pre-tax acquisition-related amortization, content fair value step-up and restructuring charges, and a $433 million income tax benefit, and compares against a year-ago quarter that had benefited from a $2.96 billion gain on debt extinguishment. The top-line decline tells much of the story: the absence of NBA rights created a roughly 20% advertising headwind in Linear Networks, and Studios revenue tumbled 39% ex-FX against last year's blockbuster theatrical slate. Streaming was the offsetting bright spot, with revenue rising 10% ex-FX to $3.08 billion and Adjusted EBITDA surging 63% ex-FX to $512 million, a trend management expects to strengthen through the second half of 2026 and into 2027 as the company targets a long-term 20%-plus Adjusted EBITDA margin for the segment.
- Streaming segment revenue growth of 10% ex-FX driven by global HBO Max expansion and subscriber growth
- Streaming Adjusted EBITDA up 63% ex-FX to $512 million with nearly 17% margin
- Ad-supported tier now ~40% of global HBO Max subscribers, up 11 percentage points YoY
- Absence of NBA created 20% ex-FX advertising headwind at Global Linear Networks
- Studios revenues down 39% ex-FX due to weaker theatrical slate vs. strong prior year comparisons
- Games revenue up 45% ex-FX on LEGO Batman release
- General entertainment delivery across linear networks grew 5%, first quarter of growth since 2022
- MLB viewership up 23% YoY, NHL viewership up 21% regular season and 50% postseason
- Total minutes across CNN platforms up 19% YoY
Forward Guidance & Outlook
WBD expects subscriber-related revenue year-over-year growth rate to further accelerate during H2 2026 and remain healthy into 2027. The company reiterates a long-term 20%+ Adjusted EBITDA margin target for the Streaming segment, expects revenues to grow at a significantly faster rate annually than operating expenses. Studios segment is expected to generate over $3 billion in Adjusted EBITDA in the medium to long-term. For Global Linear Networks, the company expects high-single-digit operating expense improvement for the full year. Quarterly Streaming margins may fluctuate due to timing of investments (e.g., front-loaded marketing for Harry Potter series debut in Q4). The Paramount merger closing is on hold until the earlier of five days after legal proceedings are complete or June 1, 2027. The company expects approximately 150 bps of annual interest cost savings from the bridge loan refinancing.
WBD YoY Financials
WBD Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.