Warner Bros. Discovery Inc - Class A
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.86%.
Did WBD Beat Earnings? Q2 2025 Results
Warner Bros. Discovery delivered a striking earnings reversal in Q2 2025, posting adjusted EPS of $0.63 against a consensus estimate of negative $0.23, a beat of 376.19%, even as revenue of $9.81 billion came in fractionally below the $9.83 billion consensus and rose just 1.0% year over year. The headline swing to profitability, anchored by a $2.96 billion pre-tax gain on debt extinguishment and a blockbuster theatrical slate that included A Minecraft Movie, Sinners, and Final Destination: Bloodlines, drove Studios segment revenue up 54% ex-FX to $3.80 billion and pushed Studios Adjusted EBITDA to $863 million from $210 million a year ago. Streaming added 3.4 million subscribers to reach 125.7 million globally, with management targeting more than 150 million by end of 2026 and at least $1.30 billion in full-year Streaming Adjusted EBITDA. The company also reiterated its planned separation into two independent entities by mid-2026, with gross debt standing at $35.60 billion and net leverage at 3.3x following significant debt retirement activity in the quarter.
- Strong theatrical slate performance with A Minecraft Movie, Sinners, Final Destination: Bloodlines, and F1 generating over $2 billion in global box office
- Streaming subscriber growth of 3.4 million in Q2 reaching 125.7 million globally
- Successful HBO Max launch in Australia driving international subscriber additions
- 10% ex-FX growth in subscriber-related revenues in Streaming segment
- Studios Adjusted EBITDA increased by $653 million year-over-year
- Streaming Adjusted EBITDA improved by $400 million year-over-year
- $3.0 billion pre-tax gain on extinguishment of debt
Forward Guidance & Outlook
The company projects at least $2.4 billion of Studios segment Adjusted EBITDA for full year 2025, progressing toward a longer-term goal of over $3 billion. Streaming Adjusted EBITDA is expected to be at least $1.3 billion in 2025. Distribution revenue growth in Streaming is expected to decelerate to the low single digit range starting in Q3 due to a restructured HBO Max U.S. distribution deal, with re-acceleration expected over 2026 aided by launches in Germany, Italy, UK, and Ireland. The company expects to surpass 150 million streaming subscribers by end of 2026. Global Linear Networks advertising revenues are expected to decline at a higher rate in Q3 versus Q2 due to a lighter sports schedule, Olympics comparisons, and prior year election coverage at CNN. NBA rights in the U.S. will not be available starting Q4. Quarterly interest expense will increase by approximately $80 million due to the bridge loan facility. A $725 million cash tax payment on debt discounts is expected in H2 2025. The separation into two independent companies is expected to occur in mid-2026.
WBD YoY Financials
WBD Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.