Aug 6, 2026, 7:04 AM ETCommunication Services

Warner Bros. Discovery — Second Quarter 2026 Earnings Summary

WBDWARNER BROS DISCOVERY INC

Financial Performance

Total revenues were $8.717 billion, a 12% decrease ex-FX from the prior year quarter ($9.812 billion).
Distribution revenues were $4.950 billion, up 1% ex-FX; Advertising revenues were $1.724 billion, down 22% ex-FX; Content revenues were $1.828 billion, down 26% ex-FX.
Net income available to Warner Bros. Discovery, Inc. was $149 million, a 91% decrease from $1.580 billion in the prior year quarter.
Adjusted EBITDA was $1.879 billion, a 6% decrease ex-FX from $1.953 billion in the prior year quarter.
Cash provided by operating activities was $848 million, down 14% from $983 million in the prior year quarter.
Free cash flow was $572 million, down 19% from $702 million in the prior year quarter, unfavorably impacted by approximately $350 million of separation and transaction-related items.
Ending Q2 net debt was $29.7 billion with a net leverage ratio of 3.4x.
As of June 30, 2026, the company held $3.4 billion in cash on hand and $33.1 billion in gross debt.

The company referenced a proposed transaction with Paramount Skydance Corporation (PSKY) as a forward-looking statement subject to regulatory approvals, closing conditions, and potential litigation.
Forward-looking statements regarding the transaction include risks related to management time disruption, retention of customers and key personnel, and market price volatility.
No specific quantitative financial guidance for future quarters was provided in the release text.

Streaming Segment: Revenues increased 10% ex-FX to $3.079 billion; Adjusted EBITDA increased 63% ex-FX to $512 million. Subscriber-related revenues grew 10% ex-FX. Advertising revenue rose 8% ex-FX, though the absence of the NBA negatively impacted growth by 16% ex-FX.
Studios Segment: Revenues decreased 39% ex-FX to $2.328 billion; Adjusted EBITDA decreased 89% ex-FX to $96 million. Theatrical revenue fell 46% ex-FX due to a weaker slate compared to the prior year's A Minecraft Movie, Sinners, and Final Destination Bloodlines. Games revenue increased 45% ex-FX driven by LEGO Batman: Legacy of the Dark Knight.
Global Linear Networks Segment: Revenues decreased 17% ex-FX to $3.991 billion; Adjusted EBITDA decreased 5% ex-FX to $1.446 billion. Distribution revenue fell 9% ex-FX due to a 10% decline in domestic linear pay TV subscribers. Advertising revenue dropped 27% ex-FX, with the absence of the NBA negatively impacting growth by 20% ex-FX.

Domestic linear pay TV subscriber declines continued to impact Distribution and Global Linear Networks segments.
The absence of NBA rights in the current year significantly negatively impacted Advertising revenue across the company, reducing year-over-year growth rates by 20% ex-FX in total and 16% ex-FX in Streaming.
International content costs increased to support HBO Max launches, partially offset by programming mix shifts.

Risks include the potential failure to complete the proposed transaction with PSKY, regulatory hurdles, litigation, and disruption to business operations.
Continued declines in domestic linear pay TV subscribers and domestic linear audiences.
Content investment volatility and separation/transaction-related costs impacting free cash flow.
Foreign exchange rate volatility affecting reported results.

Management highlighted that Streaming Adjusted EBITDA growth was positive despite the absence of the NBA, driven by global expansion and ad-lite subscriber growth.
Management noted that Studios Adjusted EBITDA decline was driven by the timing of the theatrical slate and lower intercompany content licensing.
The tone acknowledges significant headwinds from the loss of NBA rights and linear subscriber declines while emphasizing growth in the Streaming segment.

No analyst questions or answers were included in the provided press release text.

The company repaid the full $15 billion bridge loan facility during the quarter using a $13 billion Term Loan B and a €1.7 billion Term Loan B.
As of June 30, 2026, the weighted average maturity of outstanding debt was 8.3 years with a weighted average cost of 5.2%.
The $4.0 billion revolving credit facility remained undrawn as of June 30, 2026.
A $3,900 million draw was taken on the revolving receivables program, a $50 million increase from Q1.
Net income included $1.1 billion of pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.
The company posted a Shareholder Letter and hosted a conference call on August 6, 2026.