Warner Bros. Discovery(WBD) - 2024 Q4 - Annual Results

Financial Performance - Total revenues for Q4 2024 were $10.0 billion, a 1% decrease ex-FX compared to the prior year quarter[5] - Adjusted EBITDA for Q4 2024 was $2.7 billion, an 11% increase ex-FX compared to the prior year quarter[5] - Net income available to Warner Bros. Discovery, Inc. was $(0.5) billion for Q4 2024, reflecting a 24% increase in loss compared to the prior year[5] - Total revenues for FY 2024 were $39.3 billion, a 4% decrease ex-FX compared to the prior year[5] - Free cash flow for FY 2024 was $4.4 billion, a decrease of 28% compared to the prior year[5] - Net loss for the twelve months ended December 31, 2024, was $11,482 million, compared to a net loss of $3,079 million for the same period in 2023, representing an increase in losses of 273%[31] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $9,032 million, down from $10,200 million in 2023, a decrease of approximately 11.5%[34] - Cash provided by operating activities for 2024 was $5,375 million, a decrease from $7,477 million in 2023, reflecting a decline of about 28.1%[31] Subscriber Metrics - Global DTC subscribers reached 116.9 million, an increase of 6.4 million subscribers from Q3 2024[14] - DTC revenues increased 6% ex-FX to $2,651 million compared to the prior year quarter, with subscriber-related revenues up 10% ex-FX[15] - Global DTC ARPU decreased 5% ex-FX to $7.44, influenced by growth in lower ARPU international markets and ad-tier subscriber growth[15] - The aggregate number of Core DTC Subscriptions is referred to as "subscribers," with multiple subscriptions counted individually[44] - Domestic subscribers are defined as those based in the United States or Canada, while international subscribers are based outside these regions[46] Revenue Breakdown - Advertising revenues decreased by 11% ex-FX in Q4 2024, primarily due to declines in domestic linear audience[5] - Content revenues for Q4 2024 were relatively unchanged, while distribution revenues increased by 2% ex-FX[5] - Distribution revenue rose 8% ex-FX, driven by a 20% increase in subscribers and higher pricing following the launch of Max in Latin America and Europe[15] - Advertising revenue increased 27% ex-FX, primarily due to a rise in ad-lite subscribers[15] - Content revenue decreased 40% ex-FX, attributed to fewer third-party licensing deals[15] Expenses and Cash Flow - DTC operating expenses decreased 13% ex-FX to $2,242 million compared to the prior year quarter[15] - Free cash flow decreased to $2,429 million from $3,310 million, primarily due to higher net content investment[20] Debt and Assets - As of December 31, 2024, the company had $5.4 billion in cash on hand and $40.0 billion in gross debt, with a net leverage of 3.8x[19] - Total assets decreased from $122,757 million in December 2023 to $104,560 million in December 2024, a decline of approximately 14.8%[29] - The current portion of debt increased from $1,780 million in December 2023 to $2,748 million in December 2024, an increase of 54.4%[29] - Goodwill decreased significantly from $34,969 million in December 2023 to $25,667 million in December 2024, a reduction of approximately 26.6%[29] - Total liabilities decreased from $76,285 million in December 2023 to $69,622 million in December 2024, a decline of about 8.7%[29] - Cash, cash equivalents, and restricted cash increased from $4,319 million at the end of 2023 to $5,416 million at the end of 2024, an increase of approximately 25.5%[31] - The company reported a net debt of $34.6 billion, calculated by subtracting cash and cash equivalents of $5.4 billion from gross debt of $40.0 billion[47] - Gross debt is defined as total debt of $39.5 billion plus finance leases of $463 million, totaling $40.0 billion[52] Financial Definitions and Metrics - The company defines subscriber-related revenues as the sum of distribution and advertising revenues in the DTC segment, which are crucial for monitoring streaming revenue performance[49] - The DTC Average Revenue Per User (ARPU) is calculated as total subscription revenue plus net advertising revenue divided by the daily average number of paying subscribers[50] - The company excludes certain revenues and subscribers from the ARPU calculation, including those from non-strategic partnerships and free trial users who convert to subscriptions[51] - The company aims to analyze operating performance by excluding revenues from the AT&T SportsNet business, allowing for a clearer view of ongoing operations[48] - The company emphasizes the importance of net leverage, calculated as net debt divided by the sum of the most recent four quarters Adjusted EBITDA of $9.032 million[53] - The company provides detailed reconciliations of net leverage and other financial measures on its investor relations website[54]