Financial Data and Key Metrics Changes - Warner Bros. Discovery's Studios business is projected to deliver at least $2.4 billion in adjusted EBITDA in 2025, with a goal of reaching $3 billion [9] - The streaming business is on track to exceed $1.3 billion in adjusted EBITDA in 2025 and aims for over 150 million subscribers by 2026 [9][10] - The company has reduced its net leverage from over five times to 3.3 times, the lowest since the merger [10] Business Line Data and Key Metrics Changes - The Motion Pictures segment achieved a milestone by opening five consecutive films with over $45 million in domestic box office [7] - HBO Max added more than 3.4 million subscribers in Q2, continuing its global expansion [9] - Warner Bros. TV led all studios in Emmy nominations, with HBO setting a record of 142 nominations [8] Market Data and Key Metrics Changes - The company is focusing on enhancing its content licensing strategies, with an annual library revenue target of $5 billion from Warner Bros. TV and film [12] - The Networks content sales reached $580 million in 2024, significantly above the normalized run rate of approximately $200 million per quarter [20] Company Strategy and Development Direction - The strategic objectives include being the premier home for creative talent, producing high-quality film and television, and distributing content through a profitable streaming service [6] - The company is investing in its creative and operational capabilities across various segments, including HBO, Warner Bros. television, and DC studios [9] - Plans to split into two independent publicly traded companies in 2026 are underway, with current momentum expected to position both for long-term success [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's creative success and growth trajectory, particularly in the Motion Pictures and streaming segments [9] - The focus remains on delivering high-quality content and enhancing the consumer experience, with expectations for significant growth in the coming years [54][90] Other Important Information - The company is reimagining its U.S. networks portfolio as a content engine around strong unscripted brands, moving away from traditional linear networks [19] - There is a strong emphasis on bundling strategies to reduce churn and enhance customer lifetime value [83] Q&A Session Summary Question: Content licensing strategies for Warner Brothers and Discovery - Management highlighted the importance of maintaining asset value and growth over short-term financial gains, opting to sell less content into the streaming market to drive growth for HBO Max [13][14] Question: Future franchises and growth opportunities - The company is focusing on leveraging its extensive IP portfolio, including major franchises like Harry Potter and Superman, to drive revenue across various channels [26][30] Question: HBO Max U.S. distribution deal restructuring - The restructuring of the legacy deal is expected to impact revenue growth positively after 2026, with new international launches planned [46][49] Question: Addressing marketers' desire for cross-platform advertising - The company is maintaining synergy opportunities in ad sales and has seen strong pricing across all categories, particularly in sports [75] Question: Reducing churn and converting unauthorized account shares - Management is in the early stages of addressing account sharing and is implementing strategies to reduce churn through improved content scheduling and bundling [81][84]

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]