Can WBD's Studio Business Emerge as the Core Engine of EBITDA Growth?

Warner Bros. Discovery’s WBD Studio segment, comprising Warner Bros. Motion Pictures, DC Studios and Warner Bros. Television, is the creative backbone of the company’s entertainment ecosystem. The division develops, produces and distributes films, television series and games, driving both theatrical revenues and high-margin licensing income across internal and third-party platforms.

In the second quarter of 2025, Studios' revenues climbed 55% year over year to $3.8 billion, while adjusted EBITDA soared 311% to $863 million, highlighting robust operating leverage. The rebound was fueled by theatrical blockbusters such as A Minecraft Movie, Sinners and Final Destination: Bloodlines, which together delivered more than $2 billion in global box office receipts, supported by DC Studios’ Superman reboot, which opened at $220 million worldwide. Increasing internal content licensing to HBO Max and other WBD units also contributed to segment profitability. 

WBD expects the Studios segment to generate over $2.4 billion in Adjusted EBITDA for 2025, progressing toward its medium-term goal of exceeding $3 billion as it scales a 12-14-film annual slate and broadens global licensing. The Zacks Consensus Estimate for third-quarter 2025 Studios adjusted EBITDA stands at $2.46 billion, up 23.6% year over year, likely to be driven by consistent box-office momentum, expanding content licensing and steady television output.

The revitalised DC Studios franchise adds further earnings potential. Superman’s $220 million global opening validates the creative reboot, while Warner Bros. Television’s 60 Emmy nominations and rising SVOD pipeline support diversified revenue. With consumer-products revenues still only 30 cents per dollar of peer levels, WBD’s push into merchandising, licensing and experiential tie-ups could meaningfully lift margins, reinforcing the Studio division’s role as the company’s key EBITDA growth engine.

WBD Faces Stiff Competition

Warner Bros. Discovery is facing stiff competition from Netflix NFLX and Walt Disney DIS, as both are intensifying their focus on studio profitability through disciplined content investment and cost control. Netflix continues to expand its global production slate and leverage localised content to sustain EBITDA growth, while Walt Disney is optimising its studio pipeline across Pixar, Marvel and 20th Century to stabilise margins and drive franchise monetisation. Both Netflix and Walt Disney are prioritising operational efficiency and library utilisation strategies closely aligned with Warner Bros. Discovery’s emphasis on scaling creative IP while building a more resilient, high-margin studio portfolio.

WBD’s Share Price Performance, Valuation & Estimates

WBD shares have jumped 80.6% in the year-to-date period, outperforming both the Zacks Consumer Discretionary sector’s rise of 7.9% and the Zacks Broadcast Radio and Television industry’s growth of 27.4%.

WBD’s YTD Price Performance

From a valuation standpoint, WBD stock is currently trading at a forward 12-month price/sales ratio of 1.25X compared with the industry’s 4.79X. WBD has a Value Score of B.

WBD’s Valuation

The Zacks Consensus Estimate for WBD’s third-quarter 2025 loss is pegged at 6 cents per share, which has improved by 2 cents over the past 30 days, indicating a decline from the year-ago quarter’s profit of 5 cents per share.

Warner Bros. Discovery, Inc. Price and Consensus

Warner Bros. Discovery, Inc. price-consensus-chart | Warner Bros. Discovery, Inc. Quote

WBD currently holds a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research