A nice run at the box office bolstered Warner Bros. Discovery in the second quarter from A Minecraft Movie to Sinners with theatrical revenue up 38% as the company prepares to separate into two.
Total revenue was flat at $9.8 billion, in line with forecasts. The company swung to a net income of $1.58 billion for the three months ended in June from a massive loss pushing $10 billion the year before.
A year ago, in the 2024 second quarter, the stock fell below $7 to an all-time low with an $11 billion write-down largely at its networks division after losing the NBA ahead of renewals with major video providers. The share price has doubled since then to near $13 and WBD has inked deals with the top six largest distributors as the standalone linear networks company called Discovery Global will split from a slimmed down Warner Bros. by the middle of 2026.
The Motion Picture Group led by co-chairs Pamela Abdy and Michael De Luca released Final Destinations: Bloodlines and The Accountant 2 and was Apple’s distribution partner for F1 The Movie. The Studios division posted a 60% jump in revenue to $3.8 billion. Profit surged to $863 million from $210 million.
CEO David Zaslav sees studio momentum continuing, projecting Studios profit of at least $2.4 billion for the full year towards a goal of $3 billion.
Streaming added 3.4 million subscribers to reach 125.7 million.
For the re-renamed HBO Max. The platform added Australia as it continues an international rollout. Zaslav has said he wants it to reach 150 million by the end of next year when it moves into the UK, Germany, Italy and other markets.
DTC saw revenue rise 8% to $2.8 million and swung to a $293 million profit from a $107 million loss the year before
Warner Bros., the streaming and studios, company will be home to Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max and Warner Bros. Gaming Studios, and the film and television libraries and run by Zaslav.
Discovery Global includes CNN, TNT Sports in the U.S., Discovery, and free-to-air channels across Europe, the Discovery+ streaming service and Bleacher Report (B/R).
Global networks revenue fell 9% to $4.8 billion with a 25% decline in profit to $1.5 billion. Advertising revenue decreased 13% ex-FX, primarily driven by domestic audience declines of 23%.
Linear woes pushed WBD to follow Comcast in separating out networks from the growing streaming and studio business. The company unveiled its post-split leadership in late July.
In conjunction with the separation, WBD successfully completed a tender offer and consent solicitation, as well as repaid the $1.5 billion term loan due 2026, financed by a $17 billion bridge facility, resulting in a $2.2 billion reduction in gross debt. It also repaid $500 million of debt due in the quarter, resulting in a $2.7 billion total reduction in gross debt during Q2.
“We made substantive progress against each element of our strategic attack plan: returning our studios to industry leadership, scaling HBO Max globally, and optimizing our Global Linear Networks. Together, this array of success will help establish both Warner Bros. and Discovery Global as two strong and sustainable independent entities as we proceed towards our planned separation,” said Zaslav in a letter to shareholders released with the numbers.
He’ll be leading a call with analysts at 8 ET.
