WBD Q4 Earnings Miss on Linear TV Decline and Studios Weakness

Warner Bros. Discovery WBD reported a fourth-quarter 2025 loss of 10 cents per share, which missed the Zacks Consensus Estimate of earnings of 2 cents per share but narrowed from a loss of 20 cents per share in the year-ago quarter.

Revenues of $9.46 billion missed the consensus mark by 0.04% and declined 6% year over year. The company ended the quarter with 131.6 million global streaming subscribers, up 3.5 million from 128 million in the third quarter and up from 116.9 million in the prior-year period.

Warner Bros. Discovery, Inc. Revenue (TTM)

Warner Bros. Discovery, Inc. revenue-ttm | Warner Bros. Discovery, Inc. Quote

Streaming Subscriber Growth Drives Positive Performance

Streaming delivered solid growth, with global subscribers reaching 131.6 million, an increase of 3.5 million subscribers from the third quarter of 2025. Streaming revenues increased 4% ex-FX to $2.79 billion, beating the Zacks Consensus Estimate by 2.55%.

Distribution revenues increased 2% ex-FX, driven by a 13% increase in subscribers following continued growth and global expansion of HBO Max, including new distribution deals, partially offset by the domestic distribution deal renewal with a former related party, previously disclosed in the second quarter of 2025.

Advertising revenues increased 17% ex-FX to $278 million, primarily driven by an increase in ad-lite subscribers, partially offset by the absence of the NBA. The loss of NBA rights negatively impacted year-over-year growth by 3% ex-FX.

Streaming Adjusted EBITDA decreased 7% ex-FX to $393 million, beating the Zacks Consensus Estimate by 9.56%, as the company managed to exceed profitability expectations despite higher content costs to support global HBO Max expansion and increased marketing expenses.

Linear Networks and Studios' Weakness Weighs on Results

The quarter exposed significant headwinds in Warner Bros. Discovery's traditional business. Global Linear Networks' revenues decreased 13% ex-FX to $4.20 billion, beating the Zacks Consensus Estimate by 4.34%.

Distribution revenues declined 8% ex-FX, primarily driven by a 10% decrease in domestic linear pay TV subscribers, partially offset by a 3% increase in domestic affiliate rates. Advertising revenues fell 14% ex-FX to $1.44 billion, driven by domestic audience declines of 22% and the absence of NBA programming. The NBA loss alone impacted growth by 4% ex-FX.

Global Linear Networks Adjusted EBITDA plummeted 27% ex-FX to $1.41 billion, beating the Zacks Consensus Estimate by 3.92%, though the sharp year-over-year decline reflected the structural challenges facing traditional linear television.

Studios' revenues decreased 14% ex-FX to $3.18 billion, missing the Zacks Consensus Estimate by 6.9%. Content revenues fell 16% ex-FX, with theatrical revenues declining 11% ex-FX due to no releases in the current quarter, TV revenues declined 18% ex-FX due to timing of content renewals and games revenue down 34% ex-FX.

Studios Adjusted EBITDA declined 27% ex-FX to $728 million, missing the Zacks Consensus Estimate by 0.67%.

Zacks Rank & Stocks to Consider

Warner Bros. Discovery currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Consumer Discretionary sector are Sonos SONO, Carter’s CRI and Roku ROKU.

Sonos, Carter’s and Roku each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sonos shares have appreciated 9.4% in the past six months. The Zacks Consensus Estimate for Sonos’ loss for the to-be-reported quarter is pegged at 4 cents per share, indicating a year-over-year increase of 77.78%.

Carter’s shares have appreciated 17.2% in the past six months. The Zacks Consensus Estimate for Carter’s EPS for the to be reported quarter is pegged at $1.7, indicating a year-over-year decline of 28.87%.

Roku’s shares have declined 0.1% in the past six months. The Zacks Consensus Estimate for Roku’s to be reported quarter’s EPS is pegged at 34 cents per share, indicating a year-over-year increase of 278.95%.

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

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