WBD Earnings: Streaming Is Up, TV Is Dying, And A $108 Billion Sale Is Brewing

Warner Bros. Discovery, Inc. (NASDAQ:WBD) reported fiscal fourth-quarter results on Thursday.

The entertainment company reported quarterly revenue of $9.46 billion, down 7% year-on-year (Y/Y) ex-FX, topping the analyst consensus estimate of $9.31 billion.

The company reported a loss of 10 cents per share, wider than the analyst consensus estimate for a loss of 1 cent.

The quarterly net loss improved to $252 million, up from $494 million loss Y/Y.

WBD reported an adjusted EBITDA of $2.22 billion, a 20% ex-FX decline primarily driven by a decline in the Global Linear Networks segment.

Segment Drivers

Distribution revenues declined 3% ex-FX at $4.79 billion as solid growth in global streaming subscribers was more than offset by ongoing declines in domestic linear pay TV subscribers and the previously disclosed impact of the HBO Max domestic distribution deal renewal with a former related party in the second quarter.

Advertising revenues decreased 9% ex-FX at $1.70 billion as ad-lite streaming subscriber growth was more than offset by domestic linear audience declines. The absence of the NBA in the current year negatively impacted the year-over-year growth rate by 4% ex-FX

Content revenues decreased 10% ex-FX to $2.66 billion, primarily driven by lower content sales due to the timing of renewals at the Studios and Global Linear Networks segments.

The company generated $1.80 billion in operating cash flow (down 34% Y/Y) and $1.38 billion in free cash flow during the quarter (down 43% Y/Y).

It held $4.57 billion in cash and equivalents as of December 31, 2025. 

Streaming Subscribers Surge

The company ended the quarter with 131.6 million subscribers versus 116.9 million Y/Y and 128.0 million quarter-over-quarter (Q/Q).

Streaming revenues rose 4% ex-FX to $2.79 billion.

Distribution revenue increased 2% ex-FX, driven by a 13% growth in subscribers following the continued growth and global expansion of HBO Max, including new distribution deals.

Advertising revenue increased 17% ex-FX, primarily driven by increased ad-lite subscribers.

Global streaming ARPU decreased 9% ex-FX to $6.80, primarily attributable to a 11% decrease in domestic streaming ARPU to $10.45 and growth in lower ARPU international markets.

The reduction in domestic streaming ARPU was primarily driven by the impact of the domestic distribution deal renewal with a former related party.

Content revenue increased 18% ex-FX, driven by the timing of domestic third-party content sales, partially offset by lower international third-party licensing as a result of the launch of HBO Max in new international markets.

Adjusted EBITDA for the Streaming Segment was $393 million, versus $409 million Y/Y.

Studios & Linear

Revenues decreased 14% ex-FX to $3.18 billion.

Content revenue declined 16% ex-FX.

Theatrical revenue slid 11% ex-FX, due to lower content sales and lower box office revenues due to no releases in the current year quarter.

Games revenue decreased 34% ex-FX, primarily driven by higher carryover in the prior year quarter.

Adjusted EBITDA for the Studios Segment was $728 million, down from $950 million Y/Y.

Global Linear Networks revenues decreased 13% ex-FX to $4.2 billion.

Distribution revenue declined 8% ex-FX, driven by a 10% decrease in domestic linear pay TV subscribers. 

Advertising revenue decreased 14% ex-FX, primarily due to 22% declines in domestic networks’ audience and the absence of the NBA in the current year.

Content revenue decreased 32% ex-FX, primarily due to the timing of third-party licensing deals.

Deal Chatter

During the earnings conference call, CEO David Zaslav said the company has engaged with 4 bidders, which led to 8 price hikes that helped it bag a 63% increase in value versus the first offer it received in September.

The fight to acquire Warner Bros. Discovery has turned into a high-stakes battle in the entertainment and streaming industry, with Netflix Inc. (NASDAQ:NFLX) and Paramount Skydance Corp. (NASDAQ:PSKY) competing for control.

After Warner Bros. leaned toward accepting Netflix’s $82.7 billion offer, Paramount responded with a $108 billion hostile bid for the company’s full portfolio of media assets.

Paramount Skydance, backed by Larry Ellison and led by his son David Ellison, has called on Warner shareholders to sell their stakes to Paramount.

WBD Price Action: Warner Bros. Discovery shares were down 0.17% at $28.85 at the time of publication on Thursday, according to Benzinga Pro data.

Photo via Shutterstock