Core Viewpoint - Warner Bros. Discovery is rebranding its streaming platform back to HBO Max, emphasizing a shift from quantity to quality in content programming [1][3][8] Group 1: Rebranding and Strategy - The rebranding to HBO Max will take place this summer, restoring a name that was changed just two years ago [1] - The company aims to focus on high-quality programming and storytelling, moving away from the previous strategy of offering a wide array of content [1][3] - CEO David Zaslav highlighted that the return of the HBO brand is intended to accelerate growth in the streaming service [2] Group 2: Financial Performance - Warner Bros. Discovery's streaming business has improved profitability by nearly $3 billion over the past two years, with an addition of approximately 22 million subscribers in the last year [2] - The company has set a target of exceeding 150 million subscribers by the end of 2026 [2] Group 3: Competitive Landscape - The company lost live rights to NBA games for the upcoming season and is prioritizing debt reduction over new content spending to compete with Netflix, which has over 300 million subscribers [3] - Competitors like Disney are also focusing on quality content as a strategy to succeed in the streaming market [4] Group 4: Industry Context - Legacy media companies have faced challenges in achieving profitability in their streaming services, leading to a focus on advertising tiers and service bundles [5] - The recent Upfronts week in New York has seen multiple companies announcing new names for their streaming services, indicating a trend in the industry [6]

Core Viewpoint - Hollywood giants are experiencing significant differences in financial performance, with a collective trend of cost reduction amid challenges in revenue growth and profitability [1][2][3]. Financial Performance - Disney reported a revenue increase of 6.96% to $23.621 billion and a net profit surge of 1474.54% to $3.401 billion for Q2 FY2025, largely due to a 95% reduction in restructuring costs [2]. - Paramount Global's revenue decreased by 6.42% to $7.192 billion, but net profit increased by 129.6% to $161 million, attributed to a significant reduction in overall costs from $8.102 billion to $6.677 billion [2]. - Warner Bros. Discovery saw a revenue decline of 9.83% to $8.979 billion, with net losses narrowing by 52.98% to $449 million, driven by a reduction in costs from $10.225 billion to $9.016 billion [3]. Cost Management - The financial improvements for these companies are primarily due to internal cost management strategies, with significant reductions in operational expenses [3]. - Disney's entertainment segment saw a 9% revenue increase, while its sports and experience segments also reported modest growth, despite rising costs [4]. - The trend of filming and production moving overseas is partly due to lower labor costs and tax incentives, which are becoming increasingly attractive for Hollywood studios [6][7]. Globalization Strategy - Disney's announcement of a new theme park in Abu Dhabi reflects Hollywood's ongoing globalization efforts to expand market reach and reduce costs [5]. - The industry is witnessing a rise in non-American productions, with many projects being filmed outside the U.S. to capitalize on lower costs and favorable policies [6][7]. Market Challenges - The North American box office revenue for Q1 2023 was only $1.44 billion, down over 30% compared to pre-pandemic levels, indicating significant growth challenges for Hollywood companies [7].

Group 1 - The article discusses the turnaround efforts and growth potential of Warner Bros. Discovery (NASDAQ: WBD), indicating that management is two years behind the original schedule [2] - The focus is on identifying undervalued companies in the oil and gas sector, analyzing their balance sheets, competitive positions, and development prospects [1] - The author emphasizes the cyclical nature of the oil and gas industry, suggesting that it requires patience and experience to navigate [2] Group 2 - The article is part of a service that provides in-depth analysis on oil and gas companies, which is available first to members [1] - The author has a beneficial long position in WBD shares, indicating a personal investment interest in the company [3]

Group 1 - Warner Bros. Discovery's CFO Gunnar Wiedenfels will present at MoffettNathanson's 2025 Media, Internet and Communications Conference on May 15, 2025 [1] - A live webcast of the presentation will be available on the company's Investor Relations website, with an on-demand replay shortly after the presentation [2] - Warner Bros. Discovery is a leading global media and entertainment company, offering a diverse portfolio of branded content across various platforms including television, film, streaming, and gaming [3]

Core Insights - Warner Bros. Discovery (WBD) reported a first-quarter 2025 loss of 18 cents per share, missing the Zacks Consensus Estimate by 50% and showing an improvement from a loss of 40 cents in the same quarter last year [1] - Revenues decreased by 10% year over year to $8.98 billion, also missing the Zacks Consensus Estimate by 7.34% [1] Revenue Breakdown - Advertising revenues decreased by 8% year over year to $1.98 billion [2] - Distribution revenues declined by 2% year over year to $4.89 billion [2] - Content revenues plunged by 27% year over year to $1.87 billion [2] - Other revenues were reported at $247 million, down 7% from the previous year [2] - Streaming & Studios revenues were $4.35 billion, down 12% year over year [2] - Global Linear Networks revenues fell by 7% year over year to $4.77 billion [2] Subscriber Metrics - WBD ended Q1 2025 with 122.3 million global subscribers across Max, HBO Max, HBO, and Discovery+, an increase of 5.3 million sequentially [3] - Global Average Revenue Per User (ARPU) was $7.11, down from $7.44 in the previous quarter and $7.83 in the year-ago quarter [3] Stock Performance - WBD shares increased by 2.63% at the time of reporting, but have declined by 16.7% year to date, underperforming peers like Paramount Global, Disney, and Netflix [4] - Disney+ has a subscriber base of 126 million as of March 29, 2025, which is higher than WBD's [4] Detailed Financials - Streaming revenues were $2.66 billion, up 8% year over year [5] - Studios revenues fell by 18% year over year to $2.31 billion [5] - Under the Streaming segment, subscriber-related revenues increased by 9% year over year to $2.57 billion [6] - Streaming Advertising revenues surged by 35% year over year to $237 million [6] - Under the Studios segment, Distribution revenues decreased by 80% year over year to $1 million [7] - Global Linear Networks saw Distribution revenues decrease by 9% year over year to $2.56 billion [8] - Adjusted EBITDA for Q1 2025 was $2.1 billion, up 4% year over year [8] Balance Sheet and Cash Flow - As of March 31, 2025, cash and cash equivalents were $3.89 billion, down from $5.31 billion as of December 30, 2024 [9] - WBD had $6 billion in undrawn revolving credit facility as of March 31, 2025 [9] - The company ended Q1 2025 with $38 billion of gross debt and a net leverage ratio of 3.8x, having repaid $2.2 billion of debt during the quarter [10] Earnings Estimates - WBD currently holds a Zacks Rank 4 (Sell) [11] - The Zacks Consensus Estimate for Q2 2025 loss is projected at 19 cents per share, which is three cents wider than estimates from 30 days ago [11]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-34177 Warner Bros. Discovery, Inc. (Exact name of registrant as specified in its charter) Delaware 35-2333914 (State or other jurisdiction of ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

WBD chief executive David Zaslav said an internal reorganization into two operating divisions, Global Linear Networks and Studios & Streaming, means “we can move quickly if we decide to change and make a determination on restructuring.” Comcast is doing just that, far along in splitting off its linear cable networks from the rest of NBCUniversal and into a standalone public company called Versant. WBD announced a similar division but just internally and for financial reporting purposes that started with Q1 ...

Core Viewpoint - Warner Bros Discovery is considering a potential breakup as it focuses on its streaming and studio divisions while addressing challenges in its cable TV business [1][5]. Financial Performance - Warner Bros Discovery missed first-quarter revenue estimates, reporting a 10% decline in overall revenue to $8.98 billion, below the expected $9.60 billion [12]. - The company posted a larger-than-expected loss of 18 cents per share, compared to the anticipated 13-cent loss [12]. - Revenue from the studio segment fell 18% to $2.31 billion, missing estimates of $2.73 billion [8]. Streaming Business - The streaming segment showed positive growth, adding 5.3 million subscribers in the quarter, surpassing the 3.1 million estimated by analysts, bringing the total to 122.3 million [12]. - Strong content releases, including HBO's "The White Lotus" and the medical drama series "The Pitt," contributed to the growth in streaming subscribers [12]. Cable TV Challenges - The cable TV segment continues to struggle, with a 7% revenue decline in the TV networks segment, which includes CNN and Discovery Channel [12]. - The company is losing thousands of cable TV subscribers annually, increasing pressure to produce hit content and improve profitability in streaming [6]. Market Reactions - Following the news of a potential breakup, Warner Bros Discovery's shares surged over 4%, recovering from earlier losses of nearly 6% due to a disappointing quarterly report [1].

Financial Data and Key Metrics Changes - In Q1, the company gained over 5 million subscribers, totaling more than 22 million subscribers over the last twelve months [9][10] - The company delivered $339 million in EBITDA for the first quarter and is on track to achieve at least $1.3 billion in EBITDA for 2025, representing an 85% increase compared to 2024 [10][11] - The company aims to surpass its goal of 150 million subscribers by the end of next year [10] Business Line Data and Key Metrics Changes - The streaming segment is experiencing significant growth, driven by high-quality storytelling and a strong content pipeline from HBO [10][11] - Warner Bros. Television is noted as the world's leading independent TV studio, contributing to the company's cultural and commercial impact [12] - The film segment is seeing success with a mix of IP-based blockbusters and original content, highlighted by the success of the Minecraft movie and upcoming titles like Final Destination [12][13] Market Data and Key Metrics Changes - The company is focusing on local language content and local sports to enhance relevance in various regions globally [11] - The Latin America market leads in engagement, benefiting from a comprehensive offering and local originals [41][42] - The U.S. and Europe markets are aligned in engagement levels, while Asia Pacific shows slightly less engagement due to a U.S.-based content mix [42] Company Strategy and Development Direction - The company emphasizes a focus on quality over quantity in content production, aiming to enhance storytelling and cultural impact [6][10] - A ten-year plan is in place to reignite the DC brand globally, with significant upcoming releases [13] - The company is exploring bundling strategies to enhance consumer experience and reduce churn [91][92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create long-term sustainable growth and shareholder value, citing a strong global reach and demand for quality content [13] - The management noted that the advertising business is currently stable, with no material impact from macroeconomic factors observed [48] - Future growth is expected from globalization, penetration growth, ARPU growth, and product enhancements [87][90] Other Important Information - The company is actively managing its cost base to prepare for potential economic turbulence [50] - There is a strategic focus on leveraging powerful sports rights while balancing costs and profitability [29][30] - The company is committed to harvesting its extensive IP library while ensuring that key franchises remain exclusive to its platforms [75][76] Q&A Session Summary Question: Insights on capital structure and leverage ratio for global linear networks - Management refrained from speculating on capital structures but expressed satisfaction with the recent reorganization and its potential to create transparency and optionality [17][19] Question: Size of the extra member opportunity for MAX in the U.S. - Management indicated that the extra member initiative will roll out gradually, with benefits expected in 2025 and beyond [22][23] Question: Sports strategy on MAX and licensing new IPs - The company is experimenting with different models for sports content and sees opportunities for licensing while balancing costs [27][29] Question: HBO's ability to produce standout hits consistently - The strength of HBO's creative team and a focus on quality storytelling are key factors in producing successful content [35][36] Question: Impact of macroeconomic factors on advertising channels - Management reported no significant impact on advertising revenue and is closely monitoring the situation [48] Question: Clarification on NBA-related revenue and costs - Management confirmed that Q1 would have shown a significant decline without NBA revenue, but emphasized the strength of their sports rights portfolio [55][56] Question: Drivers for increasing ARPU and scaling opportunities - Management highlighted several levers for ARPU growth, including pricing adjustments and the introduction of new subscription models [62][66] Question: Content spending strategy and licensing for third-party services - The company is reallocating content spending towards higher quality productions while also exploring licensing opportunities for its extensive IP library [71][78]