A year ago, Warner Bros. Discovery was raking in cash from astonishing sales of Hogwarts Legacy, the game launched in February of 2023 that had sold more than 12 million units and hit $850 million in global sales in its first two weeks. CEO David Zaslav said then that games were key to the merged company’s strategy. It made for a very tough comp to this year as the Suicide Squad: Kill the Justice League game, also out in February, was no Hogwarts Legacy.
Games are part of the Studios segment, which saw revenue fall to $2.8 billion from $3.2 billion in the 2024 first quarter from the year before, offsetting theatrical, saw a bump from hugely successful Dune: Part 2 and Godzilla x Kong: The New Empire. Adjusted ebitda in the division fell sharply to $184 million from over $600 million. TV numbers felt the impact of strikes last year with fewer episodes delivered.
Overall, revenue of $9.958 billion was down from the year before and shy of Wall Street expectations, of over $10 billion. Ditto with net loss per share of 40 cents.
Streaming was a bright spot where WBD added 2 million subs to 99.6M and saw profit rise o $86 million from $50 million the year before. Revenue firmed, including a 70% jump in ad sales.
A new streaming bundle with Max, Disney+ and Hulu announced yesterday, which gave the stock a bounce, and an upcoming sports JV with Disney and Fox, will keep a focus on DTC in an 8 ET call with analysts.
Advertising has been down across media companies and fell here too, down 11% to $1.99 billion at the Networks division. Distribution revenue was also softer as the linear bundle declines.
Cash flow, which is key to paying down debt, swing to a positive $390 million from a negative $930 million. WBD ended March with $3.4 billion of cash on hand and $43.2 billion of gross debt. It announced this morning before earnings that it was buying up to $1.75 billion of debt.
Streaming was a bright spot, where WBD added 2 million subs to 99.6M and had a profit of $86 million, up from $50 million the year before. Revenue firmed, including a 70% jump in ad sales.
A new streaming bundle with Max, Disney+ and Hulu announced yesterday, which gave the stock a bounce then, and an upcoming sports JV with Disney and Fox, will keep a focus on DTC in an 8 ET call with analysts.
Advertising has been down across media companies and fell here too, down 11% to $1.99 billion at the Networks division. Distribution revenue was also softer.
Good news – cash flow, which is key to paying down debt, swung to a positive $390 million from a negative $930 million. WBD ended March with $3.4 billion of cash on hand and still heavy $43.2 billion of gross debt.
It announced this morning before earnings that it was buying up to $1.75 billion of debt.
“We are pleased with our progress in the first quarter as evidenced by strong results in important KPIs. We delivered meaningful growth in our streaming business with a nice acceleration in ad sales, generating nearly $90 million in positive EBITDA for the quarter,” said Zaslav. We will soon be rolling out Max to 29 countries across Europe, and the content lineup for Max over the coming year is one of our strongest ever. Warner Bros. Pictures also had a strong start to the year as the first studio to reach $1 billion in both overseas and global box office, and they have a great slate in the works. Importantly, we once again delivered strong free cash flow, even in our seasonally weakest FCF quarter. We continue to make bold moves to transform our company for the future as we position ourselves to take full advantage of the opportunities ahead.”