WBD Q4 Earnings Miss on Linear TV Decline and Studios Weakness

Core Insights - Warner Bros. Discovery (WBD) reported a fourth-quarter 2025 loss of 10 cents per share, missing the Zacks Consensus Estimate of earnings of 2 cents per share but narrowing from a loss of 20 cents per share in the year-ago quarter [1] Financial Performance - Revenues for the quarter were $9.46 billion, missing the consensus mark by 0.04% and declining 6% year over year [2] - The company ended the quarter with 131.6 million global streaming subscribers, an increase of 3.5 million from 128 million in the third quarter and up from 116.9 million in the prior-year period [2][3] Streaming Segment - Streaming revenues increased 4% ex-FX to $2.79 billion, beating the Zacks Consensus Estimate by 2.55% [3] - Distribution revenues increased 2% ex-FX, driven by a 13% increase in subscribers due to the growth and global expansion of HBO Max [4] - Advertising revenues rose 17% ex-FX to $278 million, primarily due to an increase in ad-lite subscribers, although the absence of NBA programming negatively impacted growth by 3% ex-FX [5] - Streaming Adjusted EBITDA decreased 7% ex-FX to $393 million, exceeding the Zacks Consensus Estimate by 9.56% despite higher content costs and increased marketing expenses [5] Traditional Business Challenges - Global Linear Networks' revenues decreased 13% ex-FX to $4.20 billion, beating the Zacks Consensus Estimate by 4.34% [6] - Distribution revenues declined 8% ex-FX, primarily due to a 10% decrease in domestic linear pay TV subscribers [7] - Advertising revenues fell 14% ex-FX to $1.44 billion, driven by a 22% decline in domestic audience and the absence of NBA programming, which alone impacted growth by 4% ex-FX [7] - Global Linear Networks Adjusted EBITDA plummeted 27% ex-FX to $1.41 billion, although it beat the Zacks Consensus Estimate by 3.92% [8] Studios Performance - Studios' revenues decreased 14% ex-FX to $3.18 billion, missing the Zacks Consensus Estimate by 6.9% [9] - Content revenues fell 16% ex-FX, with theatrical revenues declining 11% ex-FX due to no releases in the current quarter [9] - Studios Adjusted EBITDA declined 27% ex-FX to $728 million, missing the Zacks Consensus Estimate by 0.67% [9]