On Thursday, Warner Bros. Discovery reported its first-quarter results, which fell short of analyst expectations in both top and bottom line performance. Despite the strong showing in its streaming unit, the company’s stock managed to gain 3% on Thursday. The company faced challenges with a loss per share of 40 cents, compared to the 24 cents loss that was anticipated by analysts. Similarly, revenue came in at $9.96 billion, missing the expected $10.231 billion. This was a 7% decline in revenue from the same quarter the previous year.
Warner Bros. Discovery, known for its ownership of streaming service Max, cable TV networks like TNT and Discovery, and a film studio, witnessed a net loss of $966 million in the first quarter. However, this was an improvement from the previous year’s loss of $1.07 billion. The company’s total adjusted earnings before interest, taxes, depreciation, and amortization were down approximately 20% to $2.1 billion. Notably, Warner Bros. Discovery added 2 million direct-to-consumer streaming subscribers during the quarter, reaching a total of 99.6 million. The streaming segment showed improvement in earnings and revenue compared to the prior-year quarter.
The company saw a significant increase in advertising revenue for its streaming service, driven by higher engagement on the Max platform in the U.S. This was attributed to subscriber growth in the ad-lite tier and the introduction of sports content on the app. Warner Bros. Discovery recently announced a partnership with Disney to bundle their streaming services, offering consumers a discounted package that includes Max, Disney+, and Hulu. This marks the first collaboration between two major media companies in the streaming space.
Warner Bros. Discovery CEO, David Zaslav, emphasized the importance of bundling to retain subscribers and reduce churn in the business. The company is working on expanding its global footprint, with plans to introduce Max in more European markets ahead of the Summer Olympics in Paris. Despite challenges in advertising revenue for TV networks and the studio segment, Warner Bros. Discovery is focused on revitalizing its film studio, with upcoming projects like a new installment of Lord of the Rings expected in 2026.
In an effort to strengthen its financial position, Warner Bros. Discovery has been working towards reducing its debt load, currently standing at $43.2 billion. The company reported an improvement in cash flow, with free cash flow reaching $390 million. During the quarter, Warner Bros. Discovery repaid $1.1 billion in debt and announced a $1.75 billion cash tender offer to further lower its debt obligations.
This new and unique article provides an in-depth analysis of Warner Bros. Discovery’s first-quarter results, highlighting its challenges, successes, partnerships, and future plans. Despite falling short of analyst expectations, the company showed resilience in its streaming segment and strategic initiatives to drive growth and reduce debt.