Warner Bros Q4 Earnings: Studios Revenues Grow 16%, Max Subscribers Surge, Eyes 150 Million Subscribers By 2026

Zinger Key Points

Warner Bros. Discovery reported Q4 revenue of $10.03B, missing estimates, with a net loss of $494M and EPS loss of $0.20.
Streaming subscribers grew to 116.9M, with Max gaining 6.4M users after expansion in Latin America and Europe.
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On Thursday, Warner Bros. Discovery, Inc (NASDAQ: WBD) reported a fiscal fourth-quarter revenue decline of 1% ex-FX year-on-year to $10.03 billion, marginally missing the analyst consensus estimate of $10.19 billion.

The EPS loss of 20 cents missed the analyst consensus estimate of a 5 cent gain. The net loss was $494 million, widened from a loss of 400 million year over year.

Also Read: Warner Bros. Shuts Down Game Studios, Struggles To Revive DC and Harry Potter Franchise Success

The company reported an adjusted EBITDA of $2.72 billion, an 11% ex-FX growth.

Studios revenues were $3.66 billion, up 16% ex-FX Y/Y on a pro forma combined basis. Content revenue increased by 16%, driven by an increase in TV revenue, offset by a decline in Theatrical and Games revenue.

Theatrical revenue decreased 9% ex-FX due to fewer releases in the current year.

Games revenue declined 29% ex-FX due to the better performance of Hogwarts Legacy and Mortal Kombat 1 in the prior-year quarter.

Networks revenues were $4.77 billion, down by 4% ex-FX, on a pro forma combined basis. Distribution revenue decreased 4% ex-FX, primarily driven by declines in U.S. pay-TV subscribers and the impact of the AT&T SportsNet exit.

Advertising revenue fell 16% ex-FX, primarily driven by audience declines in domestic networks and soft advertising markets, mainly in the U.S.

Content revenue increased 74% ex-FX, primarily due to the timing of content licensing deals.

DTC revenues were $2.65 billion, up 6% ex-FX Y/Y on a pro forma combined basis. Distribution revenue increased by 8% ex-FX, primarily driven by a 20% increase in subscribers and higher pricing following the launch of Max in Latin America and Europe during the first half of 2024.

Advertising revenue increased 27% ex-FX, primarily driven by increased domestic ad-lite subscribers.

Total DTC subscribers increased to 116.9 million from 110.5 million a year ago. Global DTC ARPU was $7.44, a 5% ex-FX decrease from the prior year driven by lower ARPU international markets, ad-tier subscriber growth, and domestic wholesale subscribers, partially offset by higher pricing.

Warner Bros. added 6.4 million Max subscribers during the quarter, gaining momentum after launching service in Latin America and Europe last year, Bloomberg reports.

In the fourth quarter, WBD generated $2.72 billion in operating cash flow and $2.43 billion in free cash flow and held $5.4 billion in cash and equivalents.

The company set a goal for 150 million streaming subscribers in 2026.

Price Action: WBD stock is up 6.00% at $11.10 premarket at the last check Thursday.

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