Warner Bros. Discovery Says 2027 Could Be Its Strongest HBO Year Yet
Warner Bros. Discovery Inc. (NASDAQ:WBD) reported second-quarter results on Thursday, with earnings topping Wall Street expectations despite a revenue miss as the loss of NBA media rights, weaker advertising demand and a softer film slate weighed on its television networks and studio businesses.
Warner Bros. Discovery Second-Quarter Financial Results
The media company reported second-quarter revenue of $8.72 billion, down 12% year over year on a constant-currency basis and below the analyst consensus estimate of $9.29 billion.
Earnings came in at 6 cents per share, beating expectations for a loss of 13 cents per share.
Net income fell 91% from a year earlier to $149 million. Adjusted EBITDA declined 6% on a constant-currency basis to $1.88 billion.
Distribution revenue increased 1% to $4.95 billion, while advertising revenue fell 22% to $1.72 billion. Content revenue declined 26% to $1.83 billion.
Streaming Business Drives Growth
The streaming business remained a bright spot. Streaming revenue rose 10% on a constant-currency basis to $3.08 billion, driven by continued HBO Max subscriber growth, international expansion and new distribution agreements.
During the conference call, Warner Bros. Discovery executives said 2027 could be HBO’s strongest year yet, citing a deep lineup of returning hits and new franchise series.
CEO David Zaslav highlighted upcoming titles including Harry Potter, The White Lotus and Lanterns, while Global Streaming & Games CEO Jean-Briac Perrette said the company feels “even better” about its 2027 slate than 2026, supported by a stronger content pipeline, expanding international originals and continued streaming momentum.
Distribution revenue increased 11%, while advertising revenue rose 8% as ad-supported subscribers increased. Streaming adjusted EBITDA improved to $512 million from $293 million a year earlier.
Studios Hit By Weak Film Slate
The studios segment reported revenue of $2.33 billion, down 39% on a constant-currency basis.
Content revenue declined 41%, while theatrical revenue fell 46% due to a weaker film slate compared with the prior-year quarter, which benefited from the strong performances of A Minecraft Movie, Sinners and Final Destination Bloodlines.
Games revenue increased 45% following the release of LEGO Batman: Legacy of the Dark Knight. Studios adjusted EBITDA fell to $96 million from $863 million a year earlier.
Linear Networks Face NBA And Advertising Headwinds
Global Linear Networks revenue declined 17% to $3.99 billion. Distribution revenue fell 9%, reflecting a 10% decline in domestic linear pay-TV subscribers.
Advertising revenue dropped 27%, primarily because of a 17% decline in domestic audience levels following the loss of NBA broadcast rights. Content revenue decreased 12% due to the timing of third-party licensing agreements.
Cash Flow And Balance Sheet
Warner Bros. Discovery generated $848 million in operating cash flow and $572 million in free cash flow during the quarter and ended the period with $3.4 billion in cash and cash equivalents.
Paramount Skydance Merger Update
Separately, the company’s proposed $110 billion merger with Paramount Skydance Corp. (NASDAQ:PSKY) remains scheduled for a U.S. antitrust trial beginning March 2, 2027, although the transaction has received clearance from U.K. regulators. Warner Bros. Discovery said it remains highly confident the deal will close.
Warner Bros. Discovery Stock Performance
WBD Price Action: Warner Bros. Discovery shares were up 1.08% at $26.25 at the time of publication on Thursday, according to Benzinga Pro data.
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