Warner Bros. Discovery(US:WBD)2025-11-06 17:28Revenue Performance - Total revenues decreased by 6% to $9,045 million for the three months ended September 30, 2025, compared to $9,623 million in the same period of 2024[178]. - Distribution revenue declined by 4% for the three months ended September 30, 2025, primarily due to a 9% decrease in domestic linear subscribers[180]. - Advertising revenue fell by 17% for the three months ended September 30, 2025, attributed to a 26% decline in audience for domestic networks[181]. - Content revenue decreased by 3% for the three months ended September 30, 2025, impacted by the sublicensing of Olympic sports rights in Europe[182]. - Total revenues for the three months ended September 30, 2025, were $9,045 million, a decrease of 6% compared to $9,623 million in the same period in 2024[199]. - The Global Linear Networks segment reported revenues of $3,883 million for the three months ended September 30, 2025, a decline of 22% from $5,010 million in the same period in 2024[199]. - Total revenues decreased by 22% to $3.883 billion for the three months ended September 30, 2025, and by 13% to $13.460 billion for the nine months ended September 30, 2025[227]. - Distribution revenue fell by 8% for both the three and nine months ended September 30, 2025, primarily due to a 9% decline in domestic linear subscribers[229]. - Advertising revenue decreased by 21% and 14% for the three and nine months ended September 30, 2025, respectively, driven by a 26% decline in domestic network audiences[230]. - Content revenue plummeted by 74% for the three months and 37% for the nine months ended September 30, 2025, largely due to the sublicensing of Olympic sports rights[231]. Expenses and Costs - Costs of revenues decreased by 12% for the three months ended September 30, 2025, primarily due to lower expenses related to the broadcast of the Olympics in 2024[185]. - Selling, general and administrative expenses decreased by 2% for the three months ended September 30, 2025, mainly due to lower marketing and overhead expenses[186]. - Costs of revenues decreased by 30% for the three months and 9% for the nine months ended September 30, 2025, benefiting from the broadcast of the Olympics in 2024[232]. - Selling, general and administrative expenses decreased by 7% and 4% for the three and nine months ended September 30, 2025, respectively, mainly due to lower overhead costs[233]. Income and Profitability - Operating income increased to $611 million for the three months ended September 30, 2025, compared to $281 million in the same period of 2024[178]. - Adjusted EBITDA for the total company was $2,470 million for the three months ended September 30, 2025, reflecting a 2% increase compared to $2,413 million in the same period in 2024[200]. - Adjusted EBITDA for the Streaming segment was $345 million for the three months ended September 30, 2025, representing a 19% increase compared to the same period in 2024[197]. - Adjusted EBITDA decreased by 20% for the three months and 19% for the nine months ended September 30, 2025[234]. - The company reported an operating income of $389 million for the nine months ended September 30, 2025, compared to a loss of $10,194 million in the same period of 2024[275]. Strategic Initiatives - The company plans to separate into two publicly traded companies by mid-2026, with Warner Bros. focusing on Streaming and Studios, and Discovery Global on Global Linear Networks[169]. - The company is evaluating a range of strategic options, including advancing the Separation or potential merger structures[170]. - Management is reviewing strategic alternatives, including the potential separation of business units, which may affect future operations[276]. Subscriber Growth - The company experienced a 16% increase in Streaming subscribers for the three months ended September 30, 2025, due to global expansion of HBO Max[180]. - Total Domestic subscribers increased by 10% to 58.0 million, while Total International subscribers rose by 21% to 70.0 million, resulting in a Total Streaming subscriber count of 128.0 million, a 16% increase year-over-year[205]. Financial Position - As of September 30, 2025, the company had $4.3 billion in cash and cash equivalents and a $4.0 billion revolving credit facility[241]. - The company entered into a Bridge Loan Facility of $17.0 billion to finance early settlements and repay a $1.5 billion term loan facility[242]. - The company repaid $1,000 million of its Bridge Loan Facility during the three months ended September 30, 2025[250]. - The company repurchased or repaid $21,663 million of its senior notes during the nine months ended September 30, 2025, with $139 million of senior notes due through September 2026[251]. - Cash provided by operating activities was $2,515 million for the nine months ended September 30, 2025, a decrease from $2,660 million in the same period of 2024[256]. - Cash used in investing activities increased to $761 million for the nine months ended September 30, 2025, compared to $355 million in 2024[257]. - Cash used in financing activities was $3,123 million for the nine months ended September 30, 2025, slightly lower than $3,149 million in 2024[258]. - As of September 30, 2025, the company had cash and cash equivalents of $4,294 million and unused capacity of $8,294 million[260]. - The company expects its cash balance and cash generated from operations to be sufficient to fund its cash needs in the short and long term[261]. Market and Economic Conditions - The company anticipates potential impacts from macroeconomic conditions and competitive pressures on advertising revenues[276]. - The company is continuously monitoring the impact of the OECD's Pillar Two Global Anti-Base Erosion model rules, which introduce a global minimum tax of 15% applicable to multinational enterprises[193]. - The company faces risks related to market acceptance of new products and services, as well as operational challenges from ongoing business integration[276].