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

Warner Bros. Discovery WBD reported a first-quarter 2025 loss of 18 cents per share that missed the Zacks Consensus Estimate by 50%. The company had incurred a loss of 40 cents in the year-ago quarter. 

Revenues decreased 10% year over year to $8.98 billion, which missed the Zacks Consensus Estimate by 7.34%. Ex-forex revenues fell 9% year over year. 

Advertising revenues decreased 8% year over year to $1.98 billion. Distribution revenues declined 2% year over year to $4.89 billion. Content revenues plunged 27% year over year to $1.87 billion. Other revenues were $247 million, down 7% from the year-ago quarter’s reported figure.

Streaming & Studios reported revenues of $4.35 billion, down 12% year over year. Global Linear Networks’ revenues fell 7% year over year to $4.77 billion.

WBD’s Subscriber Base Increases in Q1

WBD ended the first quarter of 2025 with 122.3 million global Max, HBO Max, HBO, and Discovery+ subscribers, which increased 5.3 million sequentially. Global ARPU was $7.11 compared with $7.44 in the previous quarter and $7.83 in the year-ago quarter.

WBD shares are up 2.63% at the time of writing this article. Warner Bros. Discovery shares have declined 16.7% year to date (YTD), underperforming its closest peers, Paramount Global PARA, Disney DIS and Netflix NFLX. While shares of Disney have declined 6.3%, Paramount Global and Netflix shares have appreciated 10.2% and 28%, respectively, YTD.

Post first-quarter 2025 results, WBD’s subscriber base trails Disney+’s subscriber base of 126 million as of March 29, 2025.

WBD’s Q1 Quarter Details

Streaming revenues were $2.66 billion, up 8% year over year. Studios’ revenues fell 18% year over year to $2.31 billion.

Under the Streaming segment, subscriber-related revenues increased 9% year over year to $2.57 billion. Content revenues fell 11% year over year to $88 million. Other revenues were $2 million in the reported quarter. Streaming Distribution revenues increased 7% year over year to $2.33 billion, while Streaming Advertising revenues surged 35% year over year to $237 million.

Under the Studios segment, Distribution revenues decreased 80% year over year to $1 million, while Streaming Advertising revenues plunged 75% year over year to $1 million. Content revenues fell 18% year over year to $2.14 billion, while other revenues declined 8% year over year to $173 million.

Under the Global Linear Networks segment, Distribution revenues decreased 9% year over year to $2.56 billion, while Advertising revenues plunged 12% year over year to $1.76 billion. Content revenues jumped 44% year over year to $380 million while other revenues inched up 1% year over year to $78 million.

In the first quarter of 2025, adjusted EBITDA was $2.1 billion, up 4% year over year.

WBD’s Balance Sheet & Cash Flow

As of March 31, 2025, cash & cash equivalents were $3.89 billion compared with $5.31 billion as of Dec. 30, 2024. As of March 31, 2025, WBD’s $6 billion revolving credit facility was undrawn.

Warner Bros. Discovery ended first-quarter 2025 with $38 billion of gross debt and 3.8x net leverage. The company repaid $2.2 billion of debt during the reported quarter.

Zacks Rank & Earnings Estimate

Currently, Warner Bros. Discovery carries a Zacks Rank #4 (Sell). 

The Zacks Consensus Estimate for second-quarter 2025 loss is pegged at 19 cents per share, three cents wider over the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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