Warner Bros. Discovery Q1 Earnings Miss, Revenues Decline Y/Y

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]